Notices. Grant of individual exemption

49,835 words·~227 min read·/register/2007/02/12/07-614

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BILLING CODE 4410-11-M DEPARTMENT OF JUSTICE Drug Enforcement Administration Manufacturer of Controlled Substances; Notice of Application Pursuant to § 1301.33(a) of Title 21 of the Code of Federal Regulations (CFR), this is notice that on November 22, 2006, Cambrex Charles City, Inc., 1205 11th Street, Charles City, Iowa 50616, made application by renewal to the Drug Enforcement Administration

(DEA)as a bulk manufacturer of the basic classes of controlled substances listed in schedule II: Drug Schedule Amphetamine

(1100)II Methylphenidate

(1724)II Phenylacetone

(8501)II Dextropropoxyphene, bulk (non-dosage forms)

(9273)II Fentanyl

(9801)II The company plans to manufacture the listed controlled substances in bulk for sales to its customers. Any other such applicant and any person who is presently registered with DEA to manufacture such a substances may file comments or objections to the issuance of the proposed registration pursuant to 21 CFR 1301.33(a). Any such written comments or objections being sent via regular mail should be addressed, in quintuplicate, to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, Washington, DC 20537, Attention: DEA Federal Register Representative/ODL; or any being sent via express mail should be sent to DEA Headquarters, Attention: DEA Federal Register Representative/ODL, 2401 Jefferson-Davis Highway, Alexandria, Virginia 22301; and must be filed no later than April 13, 2007. Dated: February 5, 2007. Joseph T. Rannazzisi, Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration. [FR Doc. E7-2317 Filed 2-9-07; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF JUSTICE Drug Enforcement Administration Importer of Controlled Substances; Notice of Application Pursuant to 21 U.S.C. 958(i), the Attorney General shall, prior to issuing a registration under this Section to a bulk manufacturer of a controlled substance in schedule I or II and prior to issuing a regulation under 21 U.S.C. 952(a)(2)(B) authorizing the importation of such a substance, provide manufacturers holding registrations for the bulk manufacture of the substance an opportunity for a hearing. Therefore, in accordance with 21 CFR 1301.34(a), this is notice that on October 31, 2006, Fisher Clinical Services Inc., 7554 Schantz Road, Allentown, Pennsylvania 18106, made application by letter to the Drug Enforcement Administration

(DEA)to be registered as an importer of Noroxymorphone (9668), a basic class of controlled substance listed in schedule II. The company plans to import the listed substance for analytical research and clinical trials. Any bulk manufacturer who is presently, or is applying to be, registered with DEA to manufacture such basic class of controlled substance may file comments or objections to the issuance of the proposed registration and may, at the same time, file a written request for a hearing on such application pursuant to 21 CFR 1301.43 and in such form as prescribed by 21 CFR 1316.47. Any such written comments or objections being sent via regular mail should be addressed, in quintuplicate, to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, Washington, DC 20537, Attention: DEA Federal Register Representative/ODL; or any being sent via express mail should be sent to DEA Headquarters, Attention: DEA Federal Register Representative/ODL, 2401 Jefferson-Davis Highway, Alexandria, Virginia 22301; and must be filed no later than March 14, 2007. This procedure is to be conducted simultaneously with and independent of the procedures described in 21 CFR 1301.34(b), (c), (d),

(e)and (f). As noted in a previous notice published in the **Federal Register** on September 23, 1975, (40 FR 43745-46), all applicants for registration to import a basic class of any controlled substance listed in schedule I or II are, and will continue to be required to demonstrate to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, that the requirements for such registration pursuant to 21 U.S.C. 958(a), 21 U.S.C. 823(a), and 21 CFR 1301.34(b), (c), (d),

(e)and

(f)are satisfied. Dated: February 5, 2007. Joseph T. Rannazzisi, Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration. [FR Doc. E7-2328 Filed 2-9-07; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF JUSTICE Drug Enforcement Administration Importer of Controlled Substances; Notice of Application Pursuant to 21 U.S.C. 958(i), the Attorney General shall, prior to issuing a registration under this Section to a bulk manufacturer of a controlled substance in schedule I or II and prior to issuing a regulation under 21 U.S.C. 952(a)(2)(B) authorizing the importation of such a substance, provide manufacturers holding registrations for the bulk manufacture of the substance an opportunity for a hearing. Therefore, in accordance with 21 CFR 1301.34(a), this is notice that on December 14, 2006, Mallinckrodt Inc., 3600 North Second Street, St. Louis, Missouri 63147, made application by renewal to the Drug Enforcement Administration

(DEA)to be registered as an importer of the basic classes of controlled substances listed in schedule II: Drug Schedule Phenylacetone

(8501)II Coca Leaves

(9040)II Opium, raw

(9600)II Poppy Straw

(9650)II Poppy Straw Concentrate

(9670)II The company plans to import the listed controlled substances for the manufacture of controlled substances in bulk for distribution to its customers. Any bulk manufacturer who is presently, or is applying to be, registered with DEA to manufacture such basic classes of controlled substances may file comments or objections to the issuance of the proposed registration and may, at the same time, file a written request for a hearing on such application pursuant to 21 CFR 1301.43 and in such form as prescribed by 21 CFR 1316.47. Any such written comments or objections being sent via regular mail should be addressed, in quintuplicate, to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, Washington, D.C. 20537, Attention: DEA Federal Register Representative/ODL; or any being sent via express mail should be sent to DEA Headquarters, Attention: DEA Federal Register Representative/ODL, 2401 Jefferson-Davis Highway, Alexandria, Virginia 22301; and must be filed no later than March 14, 2007. This procedure is to be conducted simultaneously with and independent of the procedures described in 21 CFR 1301.34(b), (c), (d),

(e)and

(DEA)as a bulk manufacturer of the basic classes of controlled substances listed in schedule I and II: Drug Schedule Lysergic acid diethylamide

(7315)I 4-Methoxyamphetamine

(7411)I Normorphine

(9313)I Tetrahydrocannabinols

(7370)I Alphamethadol

(9605)I Amphetamine

(1100)II Methamphetamine

(1105)II Cocaine

(9041)II Hydromorphone

(9150)II Benzoylecgonine

(9180)II Hydrocodone

(9193)II Morphine

(9300)II Oxycodone

(9143)II Meperidine

(9230)II Methadone

(9250)II Oxymorphone

(9652)II The company plans to manufacture the listed controlled substances in bulk to manufacture controlled substance derivatives. These derivatives will be used in diagnostic products created specifically for internal use only. Any other such applicant and any person who is presently registered with DEA to manufacture such a substance may file comments or objections to the issuance of the proposed registration pursuant to 21 CFR 1301.33(a). Any such written comments or objections being sent via regular mail should be addressed, in quintuplicate, to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, Washington, DC 20537, Attention: DEA Federal Register Representative/ODL; or any being sent via express mail should be sent to DEA Headquarters, Attention: DEA Federal Register Representative/ODL, 2401 Jefferson-Davis Highway, Alexandria, Virginia 22301; and must be filed no later than April 13, 2007. Dated: February 5, 2007. Joseph T. Rannazzisi, Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration. [FR Doc. E7-2320 Filed 2-9-07; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF JUSTICE Drug Enforcement Administration Importer of Controlled Substances; Notice of Registration By Notice dated October 12, 2006 and published in the **Federal Register** on October 19, 2006, (71 FR 61800-61801), Tocris Cookson, Inc., 16144 Westwoods Business Park, Ellisville, Missouri 63021-7683, made application by letter to the Drug Enforcement Administration

(DEA)to be registered as an importer of Marihuana (7360), a basic class of controlled substance listed in schedule I. The company plans to import this product for non-clinical laboratory based research only. No comments or objections have been received. DEA has considered the factors in 21 U.S.C. § 823(a) and 952(a) and determined that the registration of Tocris Cookson, Inc. to import the basic class of controlled substance is consistent with the public interest and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971, at this time. DEA has investigated Tocris Cookson, Inc. to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 952(a) and 958(a), and in accordance with 21 CFR 1301.34, the above named company is granted registration as an importer of the basic class of controlled substance listed. Dated: February 5, 2007. Joseph T. Rannazzisi, Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration. [FR Doc. E7-2330 Filed 2-9-07; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket Nos. 02-09, 02-43] Edmund Chein, M.D.; Revocation of Practitioner's Registration, Denial of Application for Exporter's Registration Introduction and Procedural History This is a consolidated proceeding. On November 7, 2001, the then Administrator of the Drug Enforcement Administration, issued an Order to Show Cause and Notice of Immediate Suspension of the practitioner's Certificate of Registration, AC1643661, issued to Edmund Chein, M.D. (Respondent) of Palm Springs, California. The Notice of Immediate Suspension was based on the Administrator's preliminary conclusion that Respondent's continued registration constituted “an imminent danger to the public health and safety because of the substantial likelihood that [Respondent would] continue exporting and diverting controlled substances.” Order to Show Cause and Notice of Immediate Suspension at 6 (2001 OSC). The Order further proposed to revoke Respondent's practitioner's registration and deny any pending applications for renewal of the registration on the ground that Respondent's continued registration would be inconsistent with the public interest. *See id.* at 1; *see also* 21 U.S.C. 823(f) & 824(a)(4). Subsequently, on May 24, 2002, the Deputy Assistant Administrator, Office of Diversion Control, issued an additional Order to Show Cause (hereinafter 2002 OSC) to Respondent. This Show Cause Order proposed to deny Respondent's pending application for a registration as an exporter on the ground that issuance of a registration would be inconsistent with the public interest. 2002 OSC at 1; *see also* 21 U.S.C. 958(c) &(d); *id.* 823(d). The 2001 OSC alleged that Respondent had purchased “large amounts of anabolic steroids” from a Mexican pharmacy and “other illegitimate sources” and had distributed these substances to individuals who did not have a legitimate medical need for them. 2001 OSC at 2. The OSC further alleged that on May 28, 1996, Federal agents executed a search warrant at Respondent's medical office and seized several vials of steroids for which there were no records. *Id.* The OSC further alleged that in June 1996, DEA obtained from Henry Schein, Inc., copies of invoices which documented that Respondent had purchased controlled substances on nine different occasions between January 1995 and May 1996. *Id.* at 3. The OSC alleged that Respondent had failed to keep accurate records of the purchase, inventory, and dispensation of controlled substances. *Id.* The 2001 OSC next alleged that on January 31, 2001, DEA Diversion Investigators

(DIs)went to Respondent's Palm Springs medical office, the Palm Springs Life Extension Institute (hereinafter PSLEI), to conduct an administrative inspection. *Id.* The OSC alleged that the invoices documenting the purchases of controlled substances were at an accounting firm and not at the office. *Id.* The 2001 OSC further alleged that “none of [the] required controlled substance records were accessible,” because the records were stored in a computer and none of the office personnel then present were capable of retrieving them. *Id.* The OSC thus alleged that Respondent had violated the Controlled Substance Act by failing “to maintain in a readily available condition” initial and biennial inventory records, purchase invoices, and dispensing records. *Id.* The 2001 OSC further alleged that on February 5, 2001, DEA personnel returned to Respondent's office and obtained an inventory of controlled substances that was dated February 5, 2001, dispensing records for the period July 1, 2000, through February 1, 2001, and invoices for purchases of controlled substances from Barnes Wholesale, Inc., for the period January 1, 1999, through February 4, 2001. *Id.* The OSC also alleged that the dispensing records showed that between July 1, 2000, and February 5, 2001, Respondent dispensed anabolic steroids, a Schedule III controlled substance, and phentermine, a Schedule IV controlled substance, to persons in Korea, Belgium, Indonesia, Canada, Japan, Spain, Germany, Switzerland, Mexico, England, and Hong Kong. *Id.* at 3-4. More specifically, the OSC alleged that Respondent had made 328 illegal exports comprised of 20 exports of phentermine 30 mg., 58 exports of phentermine 15 mg., 73 exports of testosterone gel 8 mg., 12 exports of testosterone gel 100 mg., 50 exports of testosterone estradiol gel 4 mg, 113 exports of Depo testosterone 200 mg., and two exports of testosterone 50 mg. *Id.* at 4. The OSC alleged that these exports were illegal because Respondent was not registered as an exporter, *see* 21 U.S.C. 957(a), and had failed to file the necessary declarations. *See id.* section 953(e); *see also* 2001 OSC at 4. The OSC also alleged that Respondent had failed to maintain proper records of the exports. *See* 2001 OSC at 4. The 2001 OSC alleged that upon discovering the exports, a DI contacted Dr. Darryl Garber, an associate of Respondent, who informed the DI that Respondent's clinic had patient records for each recipient of the shipments, that some of the recipients were seen at the clinic and others were seen by video conferencing, and that the controlled substances were shipped by Federal Express. *See id.* The OSC alleged that the DI instructed Dr. Garber that the shipments “violated the Controlled Substances Act and must be stopped immediately,” and that the DI subsequently faxed Dr. Garber the applicable provisions of the United States Code. *Id.* The 2001 OSC next alleged that on August 23, 2001, DEA personnel visited the PSLEI and conducted a management conference with Respondent. *Id.* The OSC alleged that during this meeting, the DI told Respondent that the required records “were not readily retrievable on the date of the inspection[ ] as required” by Federal law and that Respondent acknowledged that he had discussed his non-compliance with Dr. Garber. *Id.* at 5. The OSC alleged that during the conference, Respondent admitted that based on the records provided to DEA in February 2001, he “had at least 150 exporting violations already on record.” *Id.* The OSC further alleged that Respondent admitted that he had “continued to export controlled substances” notwithstanding the March 2001 warning that the shipments were illegal, and that he would continue to do so until he “received written instructions from DEA.” *Id.* The OSC also alleged that when DEA personnel requested that Respondent produce his controlled substance shipping records, Respondent refused to do so and invoked the Fifth Amendment. *Id.* The 2001 OSC alleged that on various dates following the August 23rd, 2001 meeting, DEA personnel faxed Respondent the applicable provisions of the United States Code and instructed him that he was not authorized to either export or import controlled substances and “must immediately cease” all such activity. *Id.* Based on the above allegations, the Administrator made the preliminary finding that Respondent was “responsible for the diversion of large quantities of controlled substances in violation of 21 U.S.C. 953, 957 and 958.” *Id.* at 6. Concluding that there was a “substantial likelihood that [Respondent would] continue exporting and diverting controlled substances,” the Administrator ordered the immediate suspension of Respondent's practitioner's registration. *Id.* The 2002 OSC, which proposed the denial of Respondent's application for an exporter's registration, repeated many of the above allegations. In addition, the 2002 OSC alleged that on April 27, 2001, Respondent had applied for a registration as an exporter of Schedule III (non-narcotic) and Schedule IV controlled substances and that DEA had received the application on May 7, 2001. 2002 OSC at 2. The OSC alleged that the “application was not accepted for filing” and that Respondent's filing fee had been refunded. *Id.* The OSC also alleged that on December 17, 2001, DEA received from Respondent an undated application for a registration to export controlled substances in Schedule III (non-narcotic) and Schedule IV. *See id.* at 3. The 2002 OSC further alleged that on March 13, 2002, DEA DIs executed an administrative inspection warrant at the PSLEI. *See id.* at 3. The OSC alleged that during the inspection, the DIs seized samples of controlled substances for analysis and obtained copies of invoices, inventories, dispensing logs and patient records. *Id.* The OSC alleged that these records showed that notwithstanding the previous DEA warnings that his exports were illegal, Respondent had “continued to dispense controlled substances * * * to overseas patients until November 14, 2001,” the date he was served with the Notice of Immediate Suspension. *Id.* Finally, the OSC alleged that “DEA reviewed the patient records of selected overseas patients and determined that [Respondent had] deviated from the appropriate standard of care for the dispensation of controlled substances.” *Id.* The OSC thus concluded that Respondent had “committed acts that would render the approval of [his] pending DEA export application to be inconsistent with the public interest.” *Id.* at 3. Respondent timely requested a hearing on the allegations of each Show Cause Order; the cases were assigned to Administrative Law Judge

(ALJ)Gail Randall. The hearing on the issues raised by the 2001 Show Cause Order was initially scheduled to begin on July 9, 2002, in Riverside, California. However, on June 6, 2002, the parties filed a joint motion to consolidate the cases and to continue the hearing. On June 13, 2002, the ALJ granted the motions. ALJ Decision at 2 (ALJ). The first stage of the hearing was held in Riverside, California, on January 28-31, and February 3-6, 2003. During this portion of the hearing, Respondent objected to DEA's proposed eliciting of testimony of an expert witness, Dr. Robert Zipser, on the issue of whether Respondent's dispensing practices were within the standard of care. Among other things, Respondent asserted that the proposed testimony related to an issue that was outside the subject matter jurisdiction of this Agency. While the ALJ overruled Respondent's objection, she granted Respondent leave to file an interlocutory appeal on the issue. The ALJ further barred Dr. Zipser from testifying about Respondent's dispensing practices until the interlocutory appeal was resolved. On June 23, 2003, the Acting Administrator denied Respondent's appeal. Thereafter, the second stage of the hearing was held in Arlington, Virginia, on September 9-10, 2003, and the final stage was held in Riverside on December 9 through 11, 2003. During the hearing, both parties called witnesses and introduced documentary evidence. Following the hearing, both parties submitted proposed findings, conclusion of law, and argument. On July 28, 2005, the ALJ issued her recommended decision. In that decision, the ALJ recommended that I revoke Respondent's practitioner's registration. ALJ at 82. The ALJ further recommended that I deny Respondent's application for an export registration. *See id.* Neither party filed exceptions. Thereafter, the ALJ forwarded the record to me for final agency action. On December 29, 2005, Respondent's counsel submitted a letter to me setting forth various “issues for review, exception, appeal and judicial review,” Resp. Ltr. at 1, and including as attachments copies of various filings and motions that were previously submitted during the course of this all too lengthy proceeding. To the extent Respondent's letter raises “exceptions” as that term is used in the Administrative Procedure Act, *see* 5 U.S.C. 557(c), it is out of time. 1 *See* 21 CFR 1316.66(a) (requiring filing of exceptions “[w]ithin twenty days after the date upon which a party is served a copy of the report of the” ALJ). 1 Respondent's letter does not specify which of the ALJ's findings of fact and conclusions of law he is excepting to. Nor does it provide “a statement of supporting reasons for such exceptions, together with evidence of record * * * and citations of authorities relied upon.” 21 CFR 1316.66(a). Having carefully considered the record as a whole, I hereby issue this final order. For the reasons set forth below, I concur with the ALJ's conclusion that Respondent's continued registration as a practitioner would be inconsistent with the public interest and therefore adopt the ALJ's recommendation that Respondent's registration should be revoked. I further concur with the ALJ's conclusion that granting Respondent's application for registration as an exporter would be inconsistent with the public interest and therefore adopt the ALJ's recommendation that the application be denied. I make the following findings. Findings of Fact Respondent is a medical doctor and holds a license with the Medical Board of California. Gov. Exh. 3, at 1. Respondent graduated in 1980 from the American University of the Caribbean School of Medicine and also holds a law degree. *Id.; see also* ALJ at 5. Respondent practices anti-aging medicine and is the owner of the Palm Springs Life Extension Institute (PSLEI). ALJ at 5-6. Respondent has developed a treatment protocol called Total Hormone Replacement Therapy and obtained various patents for it. 2 *See generally* Resp. Exh. 1017. Respondent's practice involves using blood tests to determine the levels of various hormones in a person and prescribing various substances including hormones such as Human Growth Hormone and Estrogen to a patient based on the level of these hormones found in a healthy young adult. *See generally id.* Most significantly, as part of his treatment protocol, Respondent frequently prescribed and dispensed several controlled substances including testosterone in various formulations, a Schedule III anabolic steroid ( *see* 21 CFR 1308.13(f)), and phentermine, a Schedule IV stimulant. *See* 21 CFR 1308.14(e). Respondent used the term “adrenal extract” for phentermine. *See* Gov. Exh. 117; Gov. Exh. 135. 2 To obtain a U.S. patent, Respondent was not required to demonstrate the safety or effectiveness of his protocol. *See* Gov. Exh. 138, at 4 ( *Manual of Patent Examining Procedure* § 2107.03). Respondent holds a DEA Certificate of Registration as a practitioner, No. AC1643661, which authorizes him to dispense controlled substances in Schedules II, II-N, III, III-N, IV and V. Gov. Exh. 2. Respondent's registered location is 2825 Tahquitz Canyon Building A, Palm Springs, CA, 92262. *Id.* The First Investigation Respondent first came to the attention of DEA in 1994, when a U.S. Food and Drug Administration

(FDA)Special Agent

(SA)contacted Robert Brasich, a Diversion Investigator assigned to the San Diego Field Division, seeking a person to assist in an undercover investigation of Respondent. Tr. 112. The FDA SA asked the DI whether he knew of any DEA SA who could pose as body builder and perform an undercover visit with Respondent. *Id.* at 118. The FDA SA told the DI that he had personally conducted an undercover meeting during which he told Respondent that he played rugby and wanted to increase his strength and endurance. *Id.* at 120. At the end of the visit, Respondent's staff gave the FDA SA human growth hormone

(HGH)and the FDA SA subsequently received shipments of HGH on several occasions. 3 *Id.; see also* Gov. Exh. 35, at 23. 3 HGH is not a controlled substance. The facts surrounding this visit are related solely to provide context. On October 17, 1994, another FDA SA also performed an undercover visit with Respondent. *Id.* at 24. This SA told Respondent that he had an injured disc, that he lifted weights, and that he wanted to increase his muscle mass, and that he had taken steroids previously “but wanted a safer alternative.” *Id.* at 25; *see also* Tr. at 121. According to an affidavit filed to obtain a search warrant, Respondent told the SA that “the problem with anabolic steroids in the past was their use without medical supervision, but they weren't bad if administered by a doctor.” Gov. Ex. 35, at 25. At the end of the consultation, Respondent gave the SA prescriptions for various items including testosterone gel, a Schedule III controlled substance. *Id.* at 26. While Respondent obtained a blood sample, he issued the prescription for testosterone without obtaining the results. *Id.* at 26; *see also* Tr. at 149. On March 17, 1995, a Customs SA performed an undercover visit with Respondent. The Customs SA told Respondent that he was a competitive powerlifter and used anadrol, an anabolic steroid, but that he wanted HGH because he had lost competitions “to guys who [were] ‘on the juice.’ ” Gov. Exh. 35, at 32. During the visit, Respondent told the SA that “[a]fter 1990, the whole body-building industry had switched to natural testosterone, and the ‘new power lifting people use testosterone and HGH.’ ” *Id.* Respondent also told the SA that the “most effective treatment for [his] goal would involve both [HGH] and natural testosterone administered through the skin by means of a patch or gel.” *Id.* Respondent further told the SA that the “testosterone would not show up in drug testing at competitions if [he] followed [Respondent's] instructions.” *Id.* at 33. While Respondent drew blood from the SA during this visit to determine his testosterone and HGH levels, the results were not available by the end of the consultation. *Id.* at 33-34; *see also* Tr. at 149. Respondent nonetheless gave the SA prescriptions for various items including testosterone. *Id.* at 34. Moreover, Respondent gave the SA a letter entitled “testosterone Replacement Therapy,” which stated that the SA “had been diagnosed with hypogonadism for which testosterone replacement therapy was required.” *Id.* The letter further stated that all the testosterone prescriptions and refills would be filled by a pharmacy in Fairfax, Virginia, and that Respondent would send the SA's prescription directly to the pharmacy. *Id.* at 34-35. Finally, on July 20, 1995, a DEA SA conducted an undercover visit with Respondent. *Id.* The SA told Respondent that he was a powerlifter and was training to make the Olympic team. *Id.* Respondent told the SA that because he “had not done a lot of steroids in the past,” his “testosterone would be low which would provide a justification for prescribing testosterone.” *Id.* at 36. Respondent drew blood from the SA, *id.* at 37, and told him that “if the results came back low” he would also ship him HGH. *Id.* at 36. Respondent also gave the SA “a letter entitled ‘testosterone Replacement Therapy.’ ” *Id.* at 37. The letter “was identical in substance to the letter given to” the Customs SA during the third undercover visit. *Id.* Thereafter, the same Fairfax, Virginia pharmacy mentioned in the letter Respondent gave the Customs SA sent 50 mg. of testosterone gel to the DEA SA. *Id.* at 38. Subsequently, on May 23, 1996, the FDA SA obtained a search warrant for the PSLEI. *Id.* at 2. Two DEA DIs participated in the execution of the search. Tr. at 130. During the search, controlled substances, which included testosterone gel, testosterone cypionate and nandrolone decanoate, were found on the premises. *Id.* at 132; Gov. Exh. 35, at 71. Moreover, while the CSA requires a registrant to maintain at his registered location purchase records, an inventory, and a dispensing log, *see* 21 CFR 1304.03 & 1304.04, no such records were found on the premises during the search. Tr. at 134. The investigation also determined that on numerous occasions between January 1, 1995, and June 3, 1996, Respondent had purchased controlled substances including diazepam (Schedule IV) and various anabolic steroids including deca-durabolin, nandrolone decanoate, and testosterone cypionate from Henry Schein, Inc. *See* Tr. 135, Gov. Exh. 36. The Second Investigation On June 29, 1998, the Medical Board of California initiated proceedings against Respondent which resulted in an administrative hearing before a state ALJ. Govt. Exh. 3, at 1; Gov. Exh. 125. In a decision dated December 27, 1999, the state ALJ issued a decision which proposed the revocation of Respondent's state medical license. Gov. Exh. 4, at 67. On January 19, 2000, the Medical Board's Division of Medical Quality entered an order adopting the ALJ's decision with an effective date of February 18, 2000. 4 *See id.* at 32 4 Respondent, however, sought judicial review in the California state courts. On September 26, 2000, the Superior Court granted Respondent's petition in part and ordered the Medical Board to set aside its decision revoking Respondent's license and remanded the case for further proceedings; on November 9, 2000, a judgment to this effect was entered. *See* Gov. Exh. 4, at 25-26. On January 4, 2001, the Medical Board subsequently vacated and set aside its decision. *Id.* at 1. Subsequently, on August 15, 2002, the Medical Board filed an additional accusation against Respondent which alleged thirteen grounds for discipline including incompetence, prescribing without medical indication, “obtaining controlled substances by deceit, misrepresentation and subterfuge,” “dispensing controlled substances without proper privileges,” and failing to maintain adequate controlled substance records. Govt. Exh. 124, at 18; *see also id.* at 10-11. This matter was still pending at the time the record closed. *See* ALJ at 15. Pursuant to 5 U.S.C. 556(e), I take official notice of the fact that on September 22, 2005, Respondent entered into a Stipulation Settlement and Disciplinary Order with the State of California, which became effective on March 16, 2006. *See In the Matter of the Accusation Against: Edmund Chein, M.D.,* File No. 19-2000-107723, Decision at 1, Stipulated Settlement and Disciplinary Order at 14. I further note language in the stipulation asserting that it “is intended to resolve” not only California's disciplinary action but also “any disciplinary action taken by another state or the federal government based on the conduct alleged in * * * In the Matter of Edmund Chein, M.D., Docket No. 02-9 and 02-43 pending before the United States Drug Enforcement Administration.” Stipulated Settlement at 2-3. In accordance with the Administrative Procedure Act, publication of this order will be withheld for a fifteen day period in order to provide Respondent with “an opportunity to show the contrary.” 5 U.S.C. 556(e). The ALJ also found that on June 30, 1995, the Medical Board placed Respondent on probation for a three year period for false advertising and failing to obtain a fictitious name permit. *See* ALJ at 12-13. On July 20, 2000, Respondent submitted an application to renew his practitioner's registration (DEA From 224a). Gov. Exh. 1, at 1. His California license having been revoked, Respondent gave the address of his proposed registered location as 201 South Main, Suite 900, Salt Lake City, UT 84111. *Id.* at 2; Gov. Exh. 18, at 1. Moreover, in response to a question on the application, Respondent indicated that his California license had been revoked but that his Utah license was “not affected.” *See* Gov. Exh. 1, at 2. 5 Because Respondent had indicated that California had revoked his license, the application was not automatically renewed but forwarded to the DEA Salt Lake City office and then to the DEA Riverside, California field office, for further investigation, where it was assigned to Diversion Investigator Doris DeSantis. Tr. at 216-17. 5 On March 5, 2001, DEA received from Respondent a letter which requested a modification of his registration back to 2825 Tahquitz Canyon Way, Building A, Palm Springs, CA, 92262, because he had “since * * * regained [his] California Medical License.” Gov. Exh. 18. No longer holding a valid California medical license, on or about February 16, 2000, Respondent sold the PSLEI to his sister Connie Chein, a board certified physician who practices obstetrics and gynecology in Beverly Hills, California. ALJ at 6-7. Dr. Connie Chein testified that she purchased PSLEI because under California law, “you have to be a licensed physician to own a medical facility.” Tr. 1087. The ALJ found that during this period, PSLEI was operated by Dr. Darryl Garber, an associate of Respondent. *See* ALJ at 13 (citing Tr. 1050). On or about December 20, 2000 (and following the Superior Court's granting of judgment setting aside the State Board's revocation order), Dr. Connie Chein sold the PSLEI back to Respondent. *Id.* at 7. 6 6 Given the circumstances surrounding Respondent's sale of the clinic to his sister and her sale back to him, the transaction may well have been a sham. But the Government did not attempt to prove that it was. Dr. Connie Chein holds a DEA Certificate of Registration as a practitioner, No. AC7093292, with a registered location in Beverly Hills, California. Gov. Exh. 43, at 8. On various occasions, PSLEI ordered controlled substances using Dr. Connie Chein's DEA registration. *See* Gov. Exh. 43, at 2-6; Gov. Exh. 17 (invoices ordering phentermine from Barnes Wholesale); Gov. Exh. 44(d), 44(g), 44(l), & 45(a) (invoices for testosterone ordered from Amend Drug & Chemical Co., Inc.); Gov. Exh. 31 (Letter dated Dec. 17, 2001, from Marshall Gilbert, Administrator, PSLEI, to Spectrum Chemicals) (“Dr. Connie Chein is no longer with [PSLEI]. Dr. Darryl Garber is now in charge of ordering all controlled substance[s].”). During a December 13, 2001, interview with DEA Diversion Investigators

(DIs)at which she was represented by counsel, Dr. Connie Chein stated that she never gave Respondent permission to use her DEA registration to order controlled substances for PSLEI. Gov. Exh. 28, at 15. Moreover, Dr, Connie Chein stated that she never received controlled substances at her Beverly Hills registered location which were intended for PSLEI and was unaware of the fact that someone at PSLEI was using her DEA registration to order controlled substances for the clinic. *Id.* at 15-17, 19. At the hearing, Dr. Connie Chein testified that she never treated patients at PSLEI. Tr. 1092. When asked, however, as to whether she had ever prescribed or dispensed controlled substances for patients of the PSLEI, Dr. Connie Chein asserted the Fifth Amendment privilege against self-incrimination. *Id.* at 1093. Moreover, when asked whether she had ever ordered controlled substances for PSLEI, Dr. Connie Chein again invoked her Fifth Amendment privilege. *Id.* at 1094. Dr. Connie Chein also asserted her Fifth Amendment privilege when the Government attempted to question her regarding various invoices and purchase orders which used her DEA number and related documents. Tr. 1111-12; 1116-19; 1121-36. The Government contends that notwithstanding Connie Chein's ownership, Respondent remained in charge of the Palm Springs Clinic during the period in which his state license was revoked. There is substantial evidence in the record that supports this contention. For example, on February 27, 2000, Respondent wrote an “Interoffice Memo” directing the Oral/Growth Hormone Department to not “ship any bottle to Japan, if the bottles do not appear clean to you, because the Japanese custom is extremely clean.” Gov. Exh. 136, at 14. The memo further instructed that “testosterone tubes frequently have adhesive that appears black to them” and that “it must be removed * * * before it can be shipped out.” *Id.* The memo directed clinic employees to “sign that you have read this letter/memo, and return it to my desk. From, Dr. Edmund Chein.” *Id.* The memo also stated that if there were “any questions about the quality or the product, you must let Charlie or Vanessa or me know, before” shipping the products. *Id.* Respondent's secretary, who worked at PSLEI's Palm Springs, Cal. clinic, was Vanessa Koloen. Tr. 1331-36 Thereafter, in an Interoffice Memo dated February 29, 2000, Respondent directed the Growth Hormone Department to ship phentermine to a patient in Japan. *See* Gov. 105, at 36. Specifically, the Memo reads: “Mandy, please ship one

(1)bottle of phentermine to Ms. [K. H.] immediately. 7 However, ship the oral hormone, phentermine to Yamamoto Medical Clinic, instead of to her home address.” *Id.* Other documents in the record establish that Ms. Mandy Boriski was involved in the filling of orders for Respondent's patients and worked out of the Palm Springs, Cal. clinic. *See* Gov. Ex. 96, at 32, 33, 34, 36, 38. 7 To protect patient privacy, patients will be referred to by their initials. One of these documents is a July 14, 2000 memo from Ms. Boriski to Dr. S.K., a German patient. The memo, which used the clinic's Palm Springs, California address states: “I have received your fax re: the order with the pharmacy. *I am awaiting approval from Dr. Chein* for me to send the prescriptions you requested. I apologize for the delay but I am unable to send anything *without his approval.* ” Gov. Exh. 96, at 32 (emphasis added). The record also contains a December 13, 2000 e-mail from Bob Jones, a consultant and spokeperson for PSLEI to various employees of the Palms Springs location, which discussed missing testosterone shipments to a German citizen, R.D. The e-mail, which was copied to Respondent and his Secretary Vanessa Koloen, states: “Per Dr. Chein please send duplicates of their last shipments of these items today.” Gx. 107, at 23. As these various documents indicate, Respondent was still the boss during the period in which his sister putatively owned the clinic and continued to direct the clinic's employees in the handling of controlled substances. It is acknowledged that during this period, Respondent sometimes used letterhead that referred to PSLEI's “International Division” and gave an address in Salt Lake City, Utah, and typically used a prescription form that included his Utah medical license number. But even if Respondent actually maintained a medical practice in Utah, his doing so does not exclude a finding that during this period, Respondent continued to direct his employees regarding the distribution of drugs from the clinic's Palm Springs, California location. 8 8 Other documents support the conclusion that Respondent remained active in practicing medicine out of the Palm Springs, California location. On May 22, 2000, Respondent sent a letter by fax to Dr. S.K. Gov. Exh. 96, at 41. In this letter, Respondent advised Dr. S.K. that her mother was “not too old for the program” and that “[s]he may want to be on the silver program, which is the basic hormone-balancing program without the growth hormone.” *Id.* Significantly, while this document was not written on PSLEI's letterhead, Respondent used the clinic's Palm Springs fax number. The record also contains correspondence written by Respondent during this period on letterhead using the clinic's Palm Springs, Ca. address. *See* Gov. Exh. 94, at 8. In an October 6, 2000 letter, Respondent rendered medical advice to a Japanese clinic regarding patient M.I. *See id.* Subsequently, on October 13, 2000, Dr. Chein wrote this patient on PSLEI's Palm Springs, CA letterhead advising that there was a dispute between himself and the doctors at the Aoyama Medical Clinic. *Id.* at 6. Thereafter, on December 5, 2000, Respondent wrote a letter on the clinic's Palm Springs, Ca. letterhead notifying the patient that “starting from 9th November 2000 the relation between Aoyama Clinic and *my Institute* (Palm Springs Life Extension Institute, CA, U.S.A.) has come to an end.” *Id.* at 5 (emphasis added). Respondent thus represented to others that he was the owner of the clinic during the period in which his sister putatively owned it. Moreover, the statement shows Respondent's continued involvement in the business affairs of the Palm Springs clinic. Indeed, in the case of patient N.K., a Japanese citizen, Respondent wrote a letter (dated October 11, 2000) to the patient on Palm Springs, California letterhead discussing the results of a “hormonal screening panel test”; the letter also recommended that the patient take testosterone gel and Adrenal Extract (phentermine). Gov. Exh. 93, at 6. Respondent also prepared a form on “Palm Spring Life Extension Institute, Utah” letterhead, which prescribed numerous products including testosterone gel and phentermine (Adrenal Extract). *Id.* at 13. Both documents were faxed on October 19, 2000, and bear initials showing that the same person faxed both documents. *Compare id.* at 6, *with id.* at 13. Subsequently, on November 22, 2000, the Palm Springs, California location dispensed testosterone gel to this patient. *See* Gov. Exh. 15, at 20. I further note that notwithstanding her putative ownership of the clinic, Respondent's sister could not provide DEA investigators with copies of the documents that transferred ownership. *See* ALJ at 20 (¶ 74). Furthermore, Respondent's sister told DEA investigators that she had been out to the clinic's Palm Springs location once in five years. *See id.* The ALJ also found that Dr. Garber operated the clinic during this period. *Id.* at 13 (¶ 52). But during this period, Dr. Garber's registered location was at his residence and not at the clinic. *Id.* at 21 (¶ 76). In any event, the ALJ's finding that Dr. Garber operated the clinic does not preclude the additional finding that Respondent continued to exercise control over the Palm Spring location's handling of controlled substances during the period in which his sister owned the clinic. The ALJ found that Respondent dispensed controlled substance from PSLEI while his California medical license was revoked. *See* ALJ at 13-14, ¶ 52 (citing Tr. 827-29; Gov. Exh. 105, at 36, 45-46). I adopt this finding. As found above, a February 29, 2000 memo from Respondent directed an employee in the “Growth Hormone Department” to “ship one

(1)bottle of phentermine to [Ms. K. H., a Japanese patient] immediately.” Gov. Exh. 105, at 36. *See also id.* at 45-46 (Feb. 29, 2000 letter from Respondent to Ms. K. H.; “due to your twenty pound weight gain, I will add phentermine adrenal hormone immediately.”). Moreover, as explained above, the evidence shows that Respondent dispensed testosterone Gel to patient N.K. from the Palm Springs location while his California medical license was revoked. The ALJ also found that “on August 11, 2000, the Respondent, without a DEA registration entitling him to so act, sent controlled substances from PSLEI, International Division, in Salt Lake City, Utah, to Japan.” *See* ALJ at 14, ¶ 53 (citing Gov. Exh. 105, at 39-42). I do not adopt this finding. While the documents which the ALJ relied on establish that HGH and “oral hormones” were to be shipped, they do not establish that the “oral hormones” included a controlled substance. The ALJ also made a finding that “[s]ome of the shipments sent from PSLEI were mislabled to avoid disclosing that the package contained controlled substances.” ALJ 57, ¶ 192. Relatedly, the Government argues that various documents “reflect[ ] PSLEI's willingness to fraudulently misidentify shipments of drugs to mislead customs officials.” Govt. Br. at 50, ¶ 98. The document cited by the ALJ does suggest that testosterone gel was labeled as “ ‘a Skin Cream’ and as a ‘gift’ for Customs purpose.” Gov. Ex. 107, at 21. A subsequent e-mail, dated December 13, 2000, which was copied to Respondent, indicated that the substances had not been received and directed the Palm Springs staff to send a new shipment that day. *Id.* at 23. The e-mail further included “guidelines for shipping to Germany” from the patient's secretary, which stated that the goods should be declared as a “sample” with a value of “$ 5.00.” *Id.* But while the invoice that accompanied the shipment declared its value at $5.00, it also clearly described the goods as “testosterone.” *Id.* at 20. This document thus does not support the ALJ's finding. The Government also points to a September 8, 2000 fax from Ms. Boriski to a Belgian citizen informing him that his order for melatonin had been shipped and “labeled as [a] Dietary supplement * * * per your request. I hope this does eliminate any delay with customs.” Gov. Ex. 91, at 22. However, melatonin is not a controlled substance and it is arguably accurate to describe it as a “dietary supplement.” Moreover, even if it was improper to declare it as a dietary supplement, this document does not establish that Respondent was aware of this practice, and a single document does not prove that it was the clinic's policy or practice to falsify customs declarations. Finally, the record contains a letter from Dr. S.K. ordering estradiol/testosterone creme and suggesting that “it might be [declared as] a cosmetic product.” Gov. Exh. 96, at 45a. The Government, however, produced no evidence showing that the clinic did, in fact, mislabel the shipment. Accordingly, the ALJ's finding is not supported by substantial evidence. *See NLRB* v. *Columbian Enameling & Stamping Co.* , 306 U.S. 292, 300

(1939)(“Substantial evidence is more than a scintilla, and must do more than create a suspicion of the existence of the fact to be established.”). The DEA On-Site Inspections and Their Aftermath As stated above, because Respondent's state license had been revoked, DI DeSantis was assigned to conduct an investigation regarding his renewal application. On January 31, 2001, the DI went to the PSLEI in Palm Springs to interview Respondent and inspect his recordkeeping. Tr. 263; Gov. Exh. 5. Respondent was not present. Tr. 264. The DI met with Dr. Darryl Garber and presented him with a Notice of Inspection. Gov. Exh. 5. The DI asked to see various records including invoices for the purchase of controlled substances, inventories, and dispensing logs. Tr. 268-69. Dr. Garber told the DI that he could not provide the records because PSLEI had a new computer system and no one was present who could access the records. *Id.* at 269. One of PSLEI's employees told the DI that the invoices were not on-site but rather were at the office of its accountant. *Id.* at 273. The only records the DI received were two purchase orders but these had been generated by the PSLEI and were not the invoices provided by the distributor. *See* Gov. Exh.6; Tr. 274-75. The purchase orders did, however, establish that the PSLEI had recently bought phentermine. *See* Gov. Exh.6. The DI told Dr. Garber that the clinic was in violation of the CSA's implementing regulations because the invoices were required to be kept on-site. Tr. 274-76. The DI also informed Dr. Garber that the clinic was in violation because the records were not readily retrievable for inspection and copying. *Id.* at 274. On February 5, 2001, the DI returned to the PSLEI to obtain the records that the clinic was required to maintain. Once again, Respondent was not present. *Id.* at 279. The DI again met with Dr. Garber and asked for the records. *Id.* Dr. Garber asked the DI to sit in the office while he retrieved the records. *Id.* The DI waited two to three hours while Dr. Garber printed out the records. *Id.* at 280. Dr. Garber provided the DI with a one page inventory report which was dated February 5, 2001. *See* Gov. Exh. 8. Dr. Garber also provided the DI with four invoices for phentermine. Tr. 331-33; Gov. Exh. 17(a)-17(d). Although the DI had requested the invoices for all controlled substances purchased by the clinic, no invoices for the purchase of testosterone were provided. Tr. 334. Dr. Garber also provided the DI with a dispensing log for various controlled substances including testosterone gel, testosterone estradiol gel, Subligual testosterone, testosterone, and depo testosterone. *See* Gov. Exhs. 9-16; Tr. 284. Most of the dispensing logs, however, only covered the period from July 1, 2000, through February 5, 2001. 9 *See* Gov. Exhs. 9-16. Moreover, none of the logs indicated the name of the physician who had authorized each dispensing. *See id.* The logs also included the names of numerous patients who resided in foreign countries including Belgium, France, Germany, Great Britain, Spain, Switzerland, China (Hong Kong), Indonesia, Japan, South Korea, and Canada. *See* Gov. Exhs.10, 11, 12, 15, & 16. The Government subsequently compiled from these records a separate document which listed each dispensing. *See* Gov. Exh. 46. According to this document, the dispensing logs showed that Respondent's clinic exported controlled substances 317 times during the period from July 1, 2000, through February 5, 2001. 9 *See id.* ; *see also* ALJ at 57, ¶ 191. Neither Respondent nor Dr. Garber had an export registration as required under 21 U.S.C. 957 & 958. 10 On March 9, 2001, DI DeSantis contacted Dr. Garber by telephone and told him that PSLEI must stop exporting controlled substances. Tr. 1245. The DI also faxed to Dr. Garber various provisions of Federal law pertaining to the exporting of controlled substances including 21 U.S.C. 953 & 960. *Id.* ; *see also* Gov. Exh. 19. On the same day, Vanessa Koloen, a PSLEI employee, faxed to the DI copies of various documents including purchase orders and invoices related to the clinic's purchase of testosterone. *See* Gov. Exh. 20. The earliest documents were, however, dated November 20 & 21, 2000, *see* Gov. Exhs. 20(J) & 20(K), and the dispensing records indicated that testosterone had been dispensed before these dates. *See* , *e.g.* , Gov. Exh. 15, at 21-26. Two other documents provided by PSLEI used Dr. Garber's residence as the billing and shipping address. *See* Gov. Exhs. 20(F) & 20(G). The remaining documents were for purchases that occurred in mid to late February 2001, following the DI's second visit. *See* Gov. Exhs. 20(a), 20(b), 20(c), 20(d), 20(e). 9 The dispensing log for phentermine 15 mg. covered the period from July 26, 1999, through February 1, 2001. *See* Gov. Exh. 10. This log, however, had no entries before August 22, 2000. *See id.* The dispensing log for Depo testosterone covered the period July 1, 2000, through February 1, 2001. *See* Gov. Exh. 16. 10 While Dr. Garber held a DEA practitioner's registration, at the time of the January 31 and February 5, 2001 visits, his registered location was his residence in Rancho Mirage, California. *See* ALJ at 21, ¶ 76. Dr. Garber did not change his registered location to the PSLEI until February 12, 2001, after the two visits. *See id.* Subsequently, on April 27, 2001, Respondent applied for a registration to export Schedule III Non-Narcotic and Schedule IV controlled substances. *See* Gov. Exh. 48, at 3-4. According to a date stamp, the application was received at DEA in May 7, 2001, and Respondent's credit card was charged on May 15, 2001. *See id.* at 3. The application, however, was never processed and the application fee was refunded through a credit to Respondent's credit card. Tr. 2092-94 The application bears the notation “Already Have DEA#.” Gov. Exh. 48, at 3. The application was not returned to Respondent, and no one at DEA ever notified him that the application had been rejected. *See* Gov. Exh. 34 & 39; *see also* Resp. Proposed Findings at 12 (¶ 94). In December 2001, Respondent submitted a second application for registration as an Exporter. *See* Gov. Exh. 48 at 7-8. On August 23, 2001, DI DeSantis (accompanied by another DI) returned to PSLEI to conduct a conference with Respondent regarding the violations that had been found during the inspection. Tr. 545-47. The DI told Respondent that the violations included the clinic's lack of readily retrievable records, its lack of a biennial inventory, and its exporting of controlled substances to persons residing in foreign countries without an export registration. *Id.* at 547-48, 559. During the meeting, Respondent produced the statutes that the DI had faxed to Dr. Garber and acknowledged that he had discussed the violations with Dr. Garber. *Id.* at 548. Respondent admitted that he did not have an exporter's registration and claimed that under either 21 U.S.C. 953(a)(3) or (a)(4) he could export without a registration because he was sending the controlled substances to another doctor, who was legally authorized to handle controlled substances. Tr. 551-55. The DI informed Respondent that he would still need an export permit under 21 U.S.C. 953(a)(5). *Id.* at 554. These provisions, however, address the exportation of narcotic drugs and not the non-narcotic controlled substances (testosterone and phentermine) that Respondent was exporting. Rather, the export of these controlled substances is governed by 21 U.S.C. 953(e), which requires the filing of a declaration and documentary proof that the importation into the destination country is not illegal. 11 Moreover, a registration is required to export both narcotic and non-narcotic controlled substances. *See* 21 U.S.C. 957 & 958. 11 The record contains letters from the governments of Japan and Taiwan to Respondent's associate (Dr. Garber) establishing the illegality of PSLEI's exportation of phentermine to persons residing in these countries. In a December 11, 2001 letter, the Government of Japan notified Dr. Garber that “[w]ith regard to the medicine containing phentermine, you must not send the medicine to your patient in Japan.” Gov. Exh. 38(C) (Tab D) (Letter from Kaoru Misawa, Deputy Director, Compliance and Narcotics Division, Pharmaceutical and Food Safety Bureau, Ministry of Health, Labor, and Welfare of Japan, to Darryl J. Garber). According to this letter, a “patient can import the medicine into Japan if he carries the medicine containing less than 1.125 grams of phentermine by himself when entering into Japan.” *Id.* This letter further states that while the Government of Japan did not object to the exportation of testosterone gel to a patient in Japan, the medicine must be “for his personal use and of the amount within one-month['s] consumption.” *Id.* In a January 4, 2002 letter, the Government of Taiwan informed Dr. Garber that “phentermine * * * has been prohibited for use by the Department of Health since December 8, 1980, and is not allowed for importation.” Gov. Exh. 38(C) (Tab E) (Letter, Kai-Yuan Tan, M.D., Director-General, Bureau of Medical Affairs, Department of Health, Taiwan, to Darryl J. Garber, M.D.). The record also contains a letter dated July 26, 2001 from Dr. Garber to Raymond A. Conner, Diversion Group Supervisor in DEA's Riverside, California, office. In this letter, Dr. Garber acknowledged that “[i]n Japan and Korea it is against the law to prescribe Anabolic Steroids * * * and phentermine * * * for the purpose of Anti-Aging Medicine.” Gov. Exh. 38(C) (Tab C). During the meeting Respondent did not mention that he had applied for an exporter's registration. Moreover, Respondent told the DI that he had continued to export controlled substances notwithstanding her earlier admonition to Dr. Garber to stop. Tr. 557. Respondent further admitted that there had probably been many more violations in the interim but that he would not stop until “he received something in writing from” the DEA. *Id.* at 558. The other DI asked Respondent how he was shipping the controlled substances overseas. *Id.* Respondent refused to answer and invoked his Fifth Amendment privilege against self-incrimination. *Id.* He also told the investigators that “it was up to [DEA] to find out how he was shipping [the controlled substances] overseas.” *Id.* at 559. During the meeting, Respondent provided the DI with several invoices for controlled substances. One of the invoices documented that on March 14, 2001, PSLEI had purchased five kilograms of micronized testosterone from Pharmacia and Upjohn and that the product was shipped to Dr. Garber's residence. *See* Gov. Exh. 21.5, at 2. At the time, Respondent owned PSLEI and Dr. Garber was no longer registered at his residence. *Id.* Respondent also provided the DI with an invoice from Farmacias Castaneda, a pharmacy located in Tijuana, Mexico. *See* Gov. Exh. 22, Tr. 576. The invoice, which is dated June 26, 2001, indicated that the PSLEI had purchased 120 units of Depo testosterone and 40 units of Decadurabolin, two anabolic steroids and Schedule III controlled substances, from the Tijuana pharmacy. *See* Gov. Exh. 22. The pharmacy did not hold a DEA registration because DEA does not register foreign pharmacies or distributors. Tr. 573-74. Neither Respondent, nor Mr. Romero, the pharmacy's owner, was registered as an importer. *See* ALJ at 60, ¶ 205 (citing Tr. 167 & 970); Gov. Exh. 2. On August 31, 2001, DI DeSantis sent an additional fax to Respondent which included copies of 21 U.S.C. 823, 952, 953, 954 and 958. The “Comments” portion of the Cover Sheet included the following statement: I have attached all the registration requirements . * * * concerning applicants to import or export controlled substances. You are not currently registered with DEA as an exporter/importer (nor do you possess any permits to export issued by the Attorney General), thus you are not authorized to perform either activity. You must immediately cease all [activity] in these areas as previously instructed on 02/13/01 and 8/23/01 by D/I DeSantis. Gov. Exh. 23, at 1. On September 5, 2001, DeSantis sent an additional fax that included a copy of 21 U.S.C. 957 (Persons required to register), which had been omitted from the previous fax. *See* Gov. Exh. 24. On November 12, 2001, DI DeSantis along with other DEA personnel, served the first Order to Show Cause and Notice of Immediate Suspension. Tr. 591. Upon her arrival at the PSLEI, the DI was informed that Respondent was out of the country and was not expected to return for possibly two weeks. *Id.* at 592. The DI then met with Dr. Garber and asked for Respondent's DEA Certificate of Registration. *Id.* at 592. Neither Dr. Garber, nor Respondent's secretary, Vanessa Koloen, knew where the certificate was. *Id.* at 593. The DI also sought to seize the controlled substances on the premises. *Id.* Dr. Garber told the DI that Respondent “had not purchased any controlled substances” and that controlled substances at the clinic were purchased by him. *Id.* at 593-94. Dr. Garber refused to turn over the controlled substances. *Id.* The DI then requested to see the invoices for controlled substance purchases to verify Dr. Garber's statement. *Id.* at 594. Clinic personnel gave the DI various invoices. *Id; see also* Gov. Exh. 45. The first of these invoices documented that on March 26, 2001, PSLEI had purchased two kilograms of testosterone (which was received on March 30, 2001) using Connie Chein's DEA number. *See* Gov. Exh. 45a. The next three invoices documented that on three dates in February and March 2001 (Feb. 16 & 21, Mar. 13, 2001), PSLEI purchased various quantities of testosterone which was shipped to Dr. Garber's residence. *See* Gov. Exh. 45(b), (c), & (d). The first two of these invoices (the Mar. 14 Pharmacia & Upjohn and the Feb. 16 Gallipot) did not have a DEA number. The third invoice (the Feb. 21 Gallipot) used Respondent's DEA number even though the controlled substances were shipped to Dr. Garber's residence. *See* Gov. Exh. 45(d), Gov. Exh. 2. Finally, the seventh invoice documents a March 2, 2001, purchase by Dr. Garber of testosterone from Paddock Laboratories, which was shipped to Dr. Garber's residence. *See* Gov. Exh. 45(g). Of note, the invoice gives the name “Vanessa” in the box which includes purchase order information; in the “Ship To Party Address” box, the invoice gives Dr. Garber's name followed on the next line with the notation “c/o Angela Santana.” *Id.* The invoice also includes the handwritten notation: “Received by Angie 3/5/01.” *Id.* Both these individuals were PSLEI employees. Tr. 598. There is no dispute that Respondent was the owner of the PSLEI when these four purchases were made. Thereafter, on three occasions between January and March 2002, the DI (accompanied by another DI) went to PSLEI to search through its trash. Tr. 686. During the February trash run, the DIs found 50 empty boxes for a testosterone product that had been manufactured by Brovel, S.A., a Mexican firm. Tr. 709, Gov. Exh. 58. The DI subsequently had someone translate the boxes' label, which was written in Spanish. Tr. at 711. The label indicated that the testosterone was not for human consumption but rather for animal use. *See* Gov. Exh. 58, at 4; Tr. 711; *see also* Gov. Exh. 116, at 4 (declaration of FDA Associate Chief Counsel James Smith). I do not, however, adopt the ALJ's finding that because “Respondent does not treat animals[,] * * * the records supports an inference that this non-human use testosterone was compounded into a testosterone gel which was dispensed to the Respondent's human patients.” ALJ at 62. I acknowledge that the existence of the boxes does create a suspicion that the substances were dispensed to human patients. But the Government produced no additional evidence that PSLEI used this testosterone to create products that were dispensed to humans. Moreover, Respondent produced credible evidence that he performed research into the development of a more effective delivery system for testosterone. The Government did not foreclose the possibility that the testosterone was used for that purpose by producing evidence that the quantity represented by the boxes was in excess of what would be needed for research purposes. While this is a close call, it is the Government that bears the burden of proof on the issue, and I therefore conclude that the ALJ's finding is not supported by a preponderance of the evidence. During this trash run, the DIs also found a fax for an invoice documenting PSLEI's sale of various products to a resident of Japan. *See* Gov. Exh. 70. The invoice was dated October 17, 2001, and lists “Testosterone/estradiol Gel 20 ml.” and “Adrenal Extract 15 mg. # 30” as among the products sold. *Id.* As found above, PSLEI used the term “Adrenal Extract” for phentermine. Of further significance, the invoice establishes that PSLEI continued to export controlled substances following the August 23, 2001 conference and the August 31 and September 5, 2001 faxes which told Respondent to cease the exports. Another document found during this trash run bears the caption “HORMONE DEPARTMENT PRESCRIPTION SHEET.” Gov. Exh. 73. The document, which is dated October 29, 2001, makes reference to a Japanese patient and instructs a PSLEI employee to “Please ship Ms. [S.] a tube of female strength testosterone to Ginza at no charge, immediately.” *Id.* The document is signed “E. Chein, M.D.” *Id.* Following a third trash run, see Gov. Exh. 121, DI DeSantis obtained an Administrative Inspection warrant which was executed at PSLEI on March 13, 2002. Tr. 721. During the inspection, DEA personnel asked for the biennial inventories that are required by DEA regulations. *Id.* at 759-60. The clinic did not have them, id. at 760, and instead provided the investigators with a document entitled “Instant Inventory Report.” Gov. Exh. 82, at 7; Tr. at 760. DEA personnel also obtained dispensing logs and approximately 100 patient files for patients who lived outside the United States. *Id.* at 764 & 811. The dispensing logs document hundreds of instances in which Respondent dispensed/exported controlled substances to residents of foreign countries. *See, e.g,* Gov. Exh. 84 (dispensing log for testosterone-estrogen (4mg.-50 mg. 20 ml.) covering period May 1, 2001, through December 31, 2001). 12 Many of the dispensings/exports occurred following the August 23rd conference and the subsequent faxes. *See id.* at pp.1-15. Moreover, the log indicates that on November 13 and 14, 2001, the day after service of the Notice of Immediate Suspension, Respondent dispensed/exported this controlled substance thirteen times. *See id.* at 3-4. 12 The cover sheet of this document indicates that the period it covered was from “11/30/01-5/1/01.” Gov. Exh. 84. The document, however, also includes dispensings that occurred in December 2001. *See id.* at .5 & 1. The dispensing log for testosterone gel (0.8% 20 ml.) also documents that Respondent dispensed and/or exported following the service of the Notice of Immediate Suspension. *See* Gov. Exh. 87. Of note, Respondent dispensed to a Japanese patient on November 13, 2001, after service of the Notice of Immediate Suspension. *See id.* at 6. The dispensing log for phentermine 15 mg. likewise documents that Respondent made numerous dispensings and/or exports of this controlled substance to foreign patients. *See generally* Gov. Exh. 88. Moreover, it also documents that Respondent made several dispensing/ exports after service of the Notice of Immediate Suspension. *See id.* For example, on November 13, 2001, Respondent made eight dispensings to foreign patients, and on November 14, 2001, Respondent made five dispensings to foreign patients. *See id.* at 6-7. Furthermore, on November 27, 2001, Respondent dispensed to a New Jersey patient. *See id.* at 6. 13 This dispensing occurred more than two weeks after service of the Notice of Immediate Suspension. 13 Like the dispensing logs that were obtained in February 2001, some of the logs also failed to contain the name of the dispensing physician. *See* Gov. Exh. 86, at pp. 1-29 (testosterone gel 8mg./ml., 20 ml.); Gov. Exh. 89, at 2-8 (phentermine 15 mg.). On October 3, 2002, an additional search warrant was executed at the PSLEI. Tr. 836. During the search, DEA investigators seized approximately 83 pill containers labeled as “Adrenal Extract 15 mg,” which held approximately 4300 pills, and 63 pill containers labeled as “Adrenal Extract 30mg,” which held approximately 3150 pills. Gov. Exh. 135. The pills were sent to the DEA Southwest Regional Laboratory for analysis. *See id.* The lab determined that the pills contained phentermine HCL. *See id.* During the search, DEA also seized a variety of documents. Among them is the previously described “Interoffice Memo” from Respondent, which is dated February 27, 2000, and which directed PSLEI's oral/growth hormone departments to ensure the cleanliness of the testosterone products that were shipped to Japan. Gov. Exh. 136, at 14. The investigators also obtained several other memos on PSLEI's letterhead that were written from “Dr. Chein” on March 6, April 14, and July 3, 2000, that discuss shipments to Japan and Taiwan. *See id.* at 11-13. The memos, however, are not signed and do not indicate whether the memo was created by Respondent or his sister. DEA also seized another memo, which is dated January 14, 2002, and which is signed “Edmund Chein MD.” *Id.* at 10. The memo stated that “[e]ffective January 15th, all medicines being shipped to Tokyo goes [sic] directly to the patient address, except for patients with the chart number LEI-Y.” *Id.* The memo then directed that “[a]ll medicines for the patients with the chart number LEI-Y will be shipped directly to the Osaka clinic address[.]” *Id.* Finally, the memo directed that shipments for two patients should not be addressed “as Ever young Technologies” because the patients “have to pay taxes on the shipments that are addressed to Ever young Technologies.” *Id.* Respondent prepared this memo, which is signed as having been received by an employee, following the service of the Notice of Immediate Suspension. 14 14 Both the Government and Respondent elicited extensive expert testimony on whether Respondent's dispensing of testosterone and phentermine to six patients who resided in foreign countries was for a legitimate medical purpose and within the usual course of professional practice. In light of Respondent's flagrant and repeated violations of federal law, I conclude that it is not necessary to make any findings on this issue. Discussion Respondent's Challenges to the Proceeding In the course of this matter, Respondent filed numerous motions challenging various aspects of this proceeding. In light of my conclusion that there is no need to consider the expert testimony regarding Respondent's practices with respect to foreign patients, many of the issues raised in these motions are now moot. Respondent also filed motions seeking to dismiss various allegations or to bar the Government from introducing evidence on various issues. Upon reviewing the record, I am satisfied that the ALJ's rulings on these motions were correct and that further discussion is not warranted. One of the motions, however, challenges the integrity of this proceeding and therefore requires further discussion before proceeding to the merits. More specifically, Respondent alleges that the Office of Chief Counsel “engaged in a pattern of unlawful and unethical misconduct in the instant proceeding mandating the disqualification of that office.” Resp. Memorandum of Points and Authorities in Support of Respondent's Motion To Disqualify Office of Chief Counsel and Dismiss Administrative Proceeding at 1. The alleged “pattern” involves two statements in an affidavit prepared by an attorney in the Office of Chief Counsel and signed by a DEA employee which discussed the circumstances surrounding DEA's failure to process Respondent's application for an Exporter's Registration. Specifically, the employee stated that she was the acting unit chief of the registration unit when she signed the declaration (and was not), and that “the reason why Dr. Chein obtained a refund of his registration fee was ‘unexplained,’ ” Resp. Memo. at 1, when there was an explanation. Respondent argues that this amounts to the subornation of perjury and that it “mandate[s] the disqualification of [the Office of Chief Counsel] and its replacement with * * * private counsel.” *Id.* Respondent contends that this is so because “[t]he Office of Chief Counsel shall defend, cover up and represent its own interests in relation to the felony perjury charge and it will also be called to testify regarding the Respondent's Complaint that is to be filed in the District Court.” *Id.* at 3. 15 Therefore, Respondent maintains that “private counsel * * * should be required to continue with any prosecution of this matter.” *Id.* Respondent further asserts that it is not enough to simply “disregard” the “offending evidence” because this would not be an “effective discouragement of the wrong.” *Id.* at 5. Respondent thus argues that I should take the extraordinary step of dismissing the entire proceeding which took thirteen days of hearings and produced a record that includes a nearly three thousand page transcript and hundreds of exhibits. 15 Respondent did not submit a copy of the purported “felony perjury charge” for the record. He did, however, submit a copy of a proposed complaint for a *Bivens* action. As a component of the Department of Justice, this agency takes most seriously allegations of employee misconduct. Respondent's offer of proof, however, falls far short of establishing that an employee of the Chief Counsel's office suborned perjury. Moreover, even if Respondent could make out a prima facie case of subornation of perjury, he offers no authority that supports his proposed remedy. [P]roof of actual perjury is a necessary element of subornation” of perjury, *United States* v. *Hairston,* 46 F.3d 361, 376 (4th Cir. 1995), and proof of perjury requires a showing that “[a] witness testifying under oath or affirmation * * * [gave] false testimony concerning a material matter with the willful intent to provide false testimony, rather than as a result of confusion, mistake, or faulty memory.” *United States* v. *Dunnigan,* 507 U.S. 87, 94 (1993). Respondent, however, cannot show either willfulness on the part of the employee or that her statements were material. The most common formulation” of the concept of materiality is that “a concealment or misrepresentation is material if it ‘has a natural tendency to influence, or was capable of influencing, the decision of’ the decisionmaking body to which it was addressed.” *Kungys* v. *United States,* 485 U.S. 759, 770

(1988)(quoting *Weinstock* v. *United States,* 231 F.2d 699, 701 (D.C. Cir. 1956)) (other citation omitted); see also *United States* v. *Wells,* 519 U.S. 482, 489

(1997)(quoting *Kungys,* 485 U.S. at 770). The evidence must be “clear, unequivocal, and convincing.” *Kungys,* 485 U.S. at 772; *see also Herring* v. *United States,* 424 F.3d 384, 386-87 (3d Cir. 2005) (“[A] determination of fraud on the court may be justified only by the most egregious misconduct directed to the court itself, and * * * it must be supported by clear, unequivocal and convincing evidence.”) (int. quotations and citation omitted); *In re Coordinated Pretrial Proceedings in Antibiotic Antitrust Actions,* 538 F.2d 180, 195 (8th Cir. 1976). Moreover, “although the materiality of a statement rests upon a factual evidentiary showing, the ultimate finding of materiality turns on an interpretation of substantive law.” *Kungys,* 485 U.S. at 772 (int. quotations and citation omitted). As the ALJ pointed out, the issues in this case are whether Respondent's continued registration as a practitioner “is inconsistent with the public interest as that term is defined in 21 U.S.C. 823(f),” and whether issuing Respondent a registration as an exporter “would be inconsistent with the public interest as that term is defined in 21 U.S.C. 958(c) and 823(d).” ALJ Notice and Order Denying Respondent's Motion to Disqualify Office of Chief Counsel and to Dismiss Administrative Proceedings, at 7. Applying these principles, I conclude that the two statements at issue here are not material to the resolution of the issues in this case. The first allegedly perjurious statement is the employee's assertion that “I am the Acting Unit Chief of the Registration Unit,” Gov. Exh. 48, when, in fact, the employee served in this capacity on the day she was approached by the attorney about Respondent's exporter application, but served in this capacity for only a few days and was not the Acting Unit Chief on the day she signed the declaration. Tr. 2198-99. The employee did, however, investigate the facts surrounding the non-acceptance of Respondent's application. Ultimately, whether the employee was still serving as Acting Unit Chief on the day she signed the declaration is of no consequence in deciding any issue in this case. In short, the assertion is not the type of statement that “has a natural tendency to influence” the decision in this case because what matters is not her specific title on the date she signed the declaration but the fact that she investigated the incident. *See Kungys,* 485 U.S. at 770 (int. quotations and other citations omitted). Moreover, Respondent has produced no evidence, let alone that which is “clear, unequivocal, and convincing” that shows that when the employee signed the declaration, she did so with the intent to deceive. *Id.* at 772. The second allegedly perjurious statement is the employee's assertion that “[f]or an unexplained reason, DEA did not accept the application for filing” and the employee's further statement speculating that “it is likely that [Respondent] or someone from his office contacted DEA to request the refund.” Gov. Exh. 48; Resp. Memo at 1. According to Respondent, the statement was perjurious because another employee had told the declarant “that a Registration Unit supervisor had instructed her to refund [Respondent's] money because he already had a DEA number” and the employee knew “that neither [Respondent] nor anyone from his office had contacted the DEA to request a refund.” *Id.* Respondent's argument as to why this statement is material to any issue in the case is somewhat opaque. Apparently, Respondent believes that there was a “mandatory” statutory duty to register him as an exporter “unless there was a finding that to do so would not be in the public interest” and that “there was no such finding” here. Reply to Govt. Resp. to Motion to Disqualify Office of Chief Counsel at 3. Respondent further asserts that “[i]f the DEA had acted properly, and had corrected its mistake, the Respondent would have been registered.” *Id.* Under longstanding DEA policy, the approval of an application for an Exporter's registration is not a ministerial act. Rather, the application is subject to an extensive pre-registration investigation which includes a review of the six statutory factors set forth in 21 U.S.C. 823(d). *See* 21 U.S.C. 958(c). Although Respondent's application should have been processed, the violations uncovered during the January and February 2001 visits, as well as the information Respondent provided on his application regarding prior disciplinary actions of the state authorities, would have supported a finding that granting his registration would be inconsistent with the public interest. Indeed, that is why the second Show Cause Order (which proposed to deny his second application for an Exporter's registration) was issued. Respondent's assertion that his application would have been granted had DEA not mistakenly failed to process his application is thus wishful thinking. More importantly, Federal law makes clear that “[n]o person may * * * export from the United States any controlled substance * * * unless *there is in effect* with respect to such person a registration issued by the Attorney General under section 958 of this title, or unless such person is exempt from registration under subsection(b) of this section.” *Id.* section 957(a). DEA's regulations further state that “[n]o person required to be registered shall engage in any activity for which registration is required *until the application for registration is granted* and a Certificate of Registration *is issued* by the Administrator to such person.” 21 CFR 1301.13(a) (emphasis added). Furthermore, Federal law does not provide an exemption from registration because one has submitted an application which was subsequently mishandled. *See Dennis Robert Howard, M.D.* , 62 FR 32658, 32661

(1997)(“there is no ‘good faith’ exemption from liability in administrative proceedings” under the CSA). And while DEA has recognized that acting with a “good faith belief that [one is] properly registered with DEA * * * is a mitigating factor in determining the public interest,” *id.* , DEA has recognized this defense in only two situations. The first is where a person had previously held a registration for the activity and believed it to be still valid pending an appeal of a final order of revocation. *See Stanley Alan Azen, M.D.* , 61 FR 57893, 57895-96 (1996). The second is where an applicant applied for a registration and received from DEA controlled substance order forms that were imprinted with a new DEA number. *See Howard,* 62 FR at 32660. 16 *Howard* is thus properly understood as a case involving reliance on an affirmative act of the government. 16 I decline to extend the good faith defense beyond these situations. Indeed, to do so in a case like this would create an incentive for applicants to engage in activities before they had obtained the required registration and demonstrated their fitness to perform the activity. Such a rule would clearly threaten public safety. The good faith defense recognized in *Azen* is not applicable to Respondent's situation because Respondent never held an Exporter's Registration. Nor can Respondent claim that the allegedly perjurious statement is material under the defense recognized in *Howard.* While Respondent's application fee was refunded based on an employee's mistaken belief that Respondent already had a DEA number, *see* Resp. Memo at 1, Respondent does not claim that DEA personnel told him that he did not need a separate Exporter's registration and Respondent has produced no evidence that the application form was returned to him. Indeed, in his brief, Respondent concedes that DEA “never informed him” that his application had been rejected. Resp. Br. 24. Furthermore, Respondent has offered no testimony to the effect that he relied on DEA's refunding of his application fee in concluding that he did not need an Exporter's registration. In fact, during the August 2001 management conference, Respondent asserted that he was not required to obtain an Exporter's registration because he qualified for a statutory exemption under 21 U.S.C. 957(b); he did not claim that he did not need the registration because his application fee had been refunded or that the application had been returned to him and that he had relied on the handwritten statement on the application. Accordingly, because Respondent makes no claim of reliance on any act of DEA, he cannot establish the materiality of the statements regarding DEA's failure to process his application. Finally, even if Respondent had made out a prima facie case with respect to the declarant and could show that the government counsel who prepared the affidavit also intended to deceive—a point on which Respondent offers nothing more than conclusory assertions—Respondent provides no authority to support his proposed remedy of dismissing the entire proceeding. Doing so would be an especially untoward result in light of the statutory purpose to protect the public interest. Furthermore, the Government made available the declarant and Respondent was able to thoroughly examine her and demonstrate the inaccuracies in her declaration. Under these circumstances, no further relief is warranted. The Statutory Factors Respondent's Practitioner's Registration Section 304(a) of the Controlled Substances Act provides that a registration to “dispense a controlled substance * * * may be suspended or revoked by the Attorney General upon a finding that the registrant * * * has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section.” 21 U.S.C. 824(a)(4). In making the public interest determination, the Act requires the consideration of the following factors:

(1)The recommendation of the appropriate State licensing board or professional disciplinary authority.

(2)The applicant's experience in dispensing * * * controlled substances.

(3)The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.

(4)Compliance with applicable State, Federal, or local laws relating to controlled substances.

(5)Such other conduct which may threaten the public health and safety. *Id.* section 823(f). “[T]hese factors are * * * considered in the disjunctive.” *Robert A. Leslie, M.D.* , 68 FR 15227, 15230 (2003). I “may rely on any one or a combination of factors, and may give each factor the weight [I] deem[ ] appropriate in determining whether a registration should be revoked or an application for registration [should be] denied.” *Id.* Moreover, case law establishes that I am “not required to make findings as to all of the factors.” *Hoxie* v. *DEA,* 419 F.3d 477, 482 (6th Cir. 2005); *see also Morall* v. *DEA,* 412 F.3d 165, 173-74 (D.C. Cir. 2005). Factor One—The Recommendation of the State Licensing Board As explained above, on three occasions the Medical Board of California has imposed sanctions against Respondent. At the time the ALJ rendered her decision, the the most recent accusation had not been resolved. The ALJ nonetheless concluded that “[t]hroughout the Medical Board's proceedings, the Respondent has exhibited an unwillingness to practice medicine in a manner consistent with the California Medical Board's rules and regulations,” and that Respondent's “attitude” and “conduct[ ] demonstrate that [his] continued dispensing of controlled substances is not in the public interest.” ALJ at 66-67. There is some merit to the notion that if one is not willing to comply with State law they are not likely to comply with Federal law either. I conclude, however, that it is unnecessary to decide whether a registrant's unwillingness to comply with State rules that are unrelated to controlled substances can be considered under the Act when the registrant maintains a valid State license. In any event, the ALJ did not have the benefit of knowing the outcome of the most recent State proceeding which placed Respondent on probation for a variety of acts that included several related to his handling of controlled substances. *See* n.4. The Stipulated Settlement and Disciplinary Order further states that it “is intended to resolve * * * any disciplinary action taken by another State or the Federal government based on conduct alleged in * * * In the Matter of Edmund Chein, M.D., Docket No. 02-9 and 02-43 pending before the United States Drug Enforcement Administration.” Stipulated Settlement at 2-3. I acknowledge that the Medical Board acted within its sovereign prerogatives when it resolved matters arising under State law and decided to continue to license Respondent as a medical doctor. Moreover, a State can also adopt Federal standards as part of its State law. The Controlled Substance Act does not, however, delegate to State officials the authority to decide whether the continuation of a DEA registration is consistent with the public interest. *See* 21 U.S.C. 824. Rather, Congress entrusted that authority with the Attorney General of the United States, and that authority has been delegated solely to the officials of this Agency. *See id.* ; *see also* 28 CFR 0.100(b). State officials therefore lack authority to resolve a matter pending before the Drug Enforcement Administration and the Stipulated Settlement cannot bind this agency. See, *e.g.* , *Fourth Street Pharmacy* v. *DEA,* 836 F.2d 1137, 1139 (8th Cir. 1988). Moreover, even viewing the stipulated settlement as, in effect, nothing more than a recommendation to continue Respondent's registration, I decline to give it deference. As will be explained below, the record is replete with evidence of Respondent's repeated and flagrant violations of Federal law. Therefore, I conclude that it would be inconsistent with the public interest to defer to the Medical Board's recommendation and give it no weight in the public interest analysis. Factors Two and Four—Respondent's Experience in Dispensing Controlled Substances and His Record of Compliance With Laws Relating To Controlled Substances The Dispensing and Export Violations As the ALJ found, on March 17, 1995, and July 20, 1995, Respondent dispensed testosterone, an anabolic steroid and Schedule III controlled substance, to two undercover agents. As the record establishes, Respondent wrote each special agent a prescription for the steroids in response to each of the agent's representations that they were competitive powerlifters and were seeking the steroids to improve their performance in athletic competitions. Respondent also issued each agent a letter stating that they had been diagnosed with hypogonadism notwithstanding that he did not have the test results. Based on this evidence, I conclude that the prescriptions violated Federal law because Respondent issued them without a legitimate medical purpose. *See* 21 CFR 1306.04(a). 17 17 While these incidents occurred some time ago, there is no statute of limitations applicable to these proceedings, which are remedial in nature and are instituted to protect the public interest. *See Pettigrew Rexall Drugs,* 64 FR 8855, 8859 (1999). While the passage of time since the wrongdoing is a factor to be considered, the statute expressly directs that a registrant's “experience in dispensing” be considered, an inquiry which necessarily requires some review of a registrant's history. If Respondent's misconduct was limited to these two instances, this would be a different case. The record further establishes that on February 29, 2000, Respondent directed his California employees to dispense phentermine, a Schedule IV controlled substance, to a patient in Japan. On that date, Respondent's state license had been revoked and Respondent was therefore without authority under the CSA to dispense. *See* 21 U.S.C. 802(21) (“The term ‘practitioner’ means a physician * * * licensed, registered, or otherwise permitted, by the United States or the jurisdiction in which he practices * * * to * * * dispense * * *.”); *id.* section 802(10) (“The term ‘dispense’ means to deliver a controlled substance to an ultimate user * * * by, or pursuant to the lawful order of, a practitioner * * *.”). Finally, the record establishes that Respondent repeatedly dispensed controlled substances to persons residing in foreign countries. As explained more fully below, Respondent violated Federal law because he was not registered as an exporter and did not file the required declarations. Moreover, the record shows that Respondent did so even after having been notified that his conduct was illegal. Finally, Respondent did so even after he was served with the Notice of Immediate Suspension. Respondent contends that his practitioner's registration “authorize[d] him as a registered doctor to dispense to his patient, wherever that patient is located.” Resp. Exh. 75, at 4 (Resp. Memo. Pts. & Auth. in Support of Motion to Dismiss Export Charges); *see also* Resp. Br. at 22. According to Respondent, “[e]xporting and dispensing to an individual simply are two completely different matters,” Resp. Exh. 75, at 3, and “[t]hese terms simply contemplate different conduct.” *Id.* at 4. Respondent further argues that under 21 U.S.C. 822(b), a registered physician is authorized to dispense to the extent authorized by his registration and in conformity with the other provisions of subchapter I. *See* Resp. Br. at 23. In Respondent's view, under the statute he was only required to comply with subchapter I, which “expressly authorizes physicians to dispense to their patients,” and because the export statutes are located in subchapter II, he was not required to obtain an export registration and comply with the other requirements of that subchapter. *Id.* Perhaps recognizing how unpersuasive this argument is, Respondent further claims that the statute is ambiguous and that his interpretation of section 822(b) is reasonable. *Id.* The starting point in statutory construction is the language of the statute. *Ardestani* v. *INS,* 502 U.S. 129, 135

(1991)(other citations omitted). Section 302(b) of the CSA provides that: Persons registered by the Attorney General under this subchapter to manufacture, distribute, or dispense controlled substances * * * are authorized to possess, manufacture, distribute or dispense such substances * * * to the extent authorized by their registration and in conformity with the other provisions of this subchapter. 21 U.S.C. 822(b). As the Supreme Court has recognized, “[t]his is a qualified authorization of certain activities, not a blanket authorization of all acts by certain persons.” *United States* v. *Moore,* 423 U.S. 122, 131 (1975). The statute grants a registrant authority only to perform those acts “authorized by their registration.” 21 U.S.C. 822(b). Contrary to Respondent's understanding, the “in conformity with the provisions of this subchapter” clause is a further “limitation” on a registrant's authority. *Moore,* 423 U.S. at 131. It compels a registrant to obey the requirements contained in Subchapter I. What it does not do is excuse a registrant from complying with other requirements of federal law such as those imposed by Subchapter II, the Controlled Substances Import and Export Act (CSIEA). Indeed, under Respondent's interpretation, any entity which possessed a distributor's registration would also be exempt from the requirement of obtaining an exporter's registration (as well as obtaining the permits or filing the necessary declarations) because the term “distribute” is broadly defined as “mean[ing] to deliver * * * a controlled substance,” 21 U.S.C. 802(11), which is what an exporter does when it ships a product to a foreign entity. DEA has never interpreted the Act in this manner for obvious reason—it would render the CSIEA a nullity. And contrary to Respondent's second contention that Federal law is ambiguous, both the statutes and our regulations make clear that Respondent was required to obtain an Exporter's registration to ship controlled substances to foreign countries. Indeed, Respondent completely ignores the clear text of the Export Registration provision, 21 U.S.C. 957(a). This section expressly provides that “[n]o person may * * * export from the United States *any controlled substance* * * * unless there is in effect with respect to such person a registration issued by the Attorney General *under section 958 of this title,* or unless such person is exempt from registration under subsection(b) of this section.” 21 U.S.C. 957(a) (emphasis added). While the statute does not define the term “export,” the regulations do. *See* 21 CFR 1300.01(b)(12). “The term * * * means, with respect to any article, any taking out or removal of such article from the jurisdiction of the United States (whether or not such taking out or removal constitutes an exportation within the meaning of the customs and related laws of the United States).” *Id.* Relatedly, the regulations define “[t]he term *exporter* [to] include[ ] every person who exports * * * controlled substances listed in any schedule.” *Id.* 1301(b)(13). Shipping a controlled substance to a person residing in a foreign country is to take out or remove the “article from the jurisdiction of the United States,” *id.* 1301(b)(12), even if the person the drug is being shipped to is an ultimate user. Beyond that, Congress clearly stated that a person may not export a controlled substance, “unless there is in effect with respect to such person a registration issued * * * under section 958 of this title.” 21 U.S.C. 957(a). A practitioner's registration is not issued under section 958, but rather under section 823(f). It thus does not provide its holder with authority to export. Nor is there any merit to Respondent's contention that because he shipped out only small amounts of controlled substances, he was not engaged in exporting. Section 957(a) clearly provides that exporting “any controlled substance” triggers the registration requirement unless a person falls within one of the three statutory exemptions. As the plain language demonstrates, there is no threshold amount which triggers the registration requirement. Rather, to export any amount, no matter how small, a person must first obtain an exporter's registration. 18 18 Indeed, each exportation was a felony under Federal law. *See* 21 U.S.C. § 960. The exemptions to the export registration requirement also foreclose Respondent's interpretation. While the statute exempts from registration “[a]n ultimate user who possesses” a controlled substance for lawful use by themselves or a family member, this provision does not apply to Respondent. 21 U.S.C. 957(b)(1)(C). Under this exemption, an ultimate user must have the controlled substance “in his possession” at the time of export from the United States. *Id.* section 956(a)(1). Shipping controlled substances to persons in foreign countries is thus not within this exemption; the other exemptions are not remotely applicable to Respondent's conduct. *See id.* Section 957(b)(1). DEA's Regulations also provided clear notice to Respondent that he was required to register as an Exporter. Under 21 CFR 1301.13(e), “[a]ny person who is required to be registered and who is not so registered, shall make application for registration for one of the following groups of controlled substance activities, which are *deemed to be independent of each other.* ” (emphasis added). The regulation then provides a table that lists each activity and the coincident activities that are permissible under a registration for a particular activity. As the table makes clear, dispensing and exporting are independent activities. *See id.* Moreover, exporting is not included in the Regulation's discussion of the “[c]oincident activities allowed” for a registration which authorizes dispensing. *See id.* As the foregoing demonstrates, the law and regulations provided clear notice to Respondent that he could not ship controlled substances to persons residing in foreign countries without obtaining an export registration. And while it is true that Respondent was not required to obtain an Export Permit for either the testosterone or phentermine he exported, 19 he was still required to file an Export Declaration (DEA—Form 236) and submit “documentary proof that [the] importation is not contrary to the laws or regulations of the country of destination” for each shipment. 21 U.S.C. 953(e). 20 19 While the DI may have misinformed Respondent that he was required to obtain a permit, she did not tell him that he had no obligation to comply with Federal law. 20 Respondent also contends that he was not required to file the declarations (DEA Form 236) because the form “requires the listing of the name and address of the ‘foreign consignee/consignor,’” and that “[i]n this case, there is no ‘foreign consignee/consignor,’ since the recipients are end user patients.” Resp. Br. 26. Respondent further contends that these “terms are used in trade to describe the persons from whom and to whom goods are shipped for sale to third parties.” *Id.* The short answer to this contention is that in common usage, the term “consignee” means “one to whom something is consigned or shipped.” *Merriam-Webster's Collegiate Dictionary* 246 (10th ed. 1998). Beyond that, the record contains a copy of the “Commercial Invoice” form that Respondent used to ship products (including testosterone) to his foreign patients. Gov. Exh. 107, at 20. Under this form, which used the term “consignee,” Respondent's clinic inserted the patient's name. *See id.* As the record demonstrates, phentermine is a controlled substance in Belgium, Canada, Germany, Indonesia, Japan, the Republic of Korea, and Taiwan. Gov. Exh. 38(c), at 5. The record also establishes that both Japan and Taiwan prohibit the importation of this drug. *Id.* at Tabs D & E. Furthermore, testosterone is controlled in both Canada and the United Kingdom. *See id.* at 5. Respondent's failure to declare these shipments to DEA prevents the United States from fulfilling its treaty obligations and denies the country of destination the opportunity to determine whether a shipment of a controlled substance is permissible before it occurs. *See id.* at 3. It thus undermines the system of international cooperation to prevent the illegal flow of controlled substances. *See* , *e.g.* , Convention on Psychotropic Substances, 1971, Art. 21 (“[T]he Parties shall * * * [a]ssist each other in the campaign against the illicit traffic in psychotropic substances * * * [and] [c]o-operate closely with each other * * * with a view to maintaining a co-ordinated campaign against the illicit traffic.”). Respondent further contends that he acted in good faith to obtain an Export registration. But as explained above, Federal law makes clear that “[n]o person may* * * export from the United States any controlled substance * * * unless [a registration] is in effect,” 21 U.S.C. 957(b), and the regulations further provide that a person cannot “engage in any activity for which registration is required until the application * * * is granted and a Certificate of Registration is issued.” 21 CFR 1301.13(a). Determining whether the granting of an application for an export registration is consistent with the public interest requires an extensive and time consuming investigation into the same criteria that apply to manufacturers. 21 U.S.C. 958(c) & 823(d). Granting such a registration is not a ministerial act, and in this case, the conduct uncovered before Respondent even applied for the registration was enough to deny his application. Furthermore, the record establishes that Respondent subsequently acted with deliberate disregard for the requirements of federal law. Both during the August 2001 management conference, and in several faxes thereafter, Respondent was warned by the DI to stop the foreign shipments. He nonetheless continued to send controlled substances to persons in foreign countries. Furthermore, notwithstanding the service of the Notice of Immediate Suspension of his registration, Respondent made further dispensings of controlled substances to persons who resided both within the U.S. and abroad. Respondent's conduct demonstrates that he acted with a deliberate disregard for the law. *The Import Allegations* The record also contains evidence suggesting that Respondent obtained testosterone products from Mexico. This evidence includes the invoice which Respondent gave the DI during the August 2001 management conference. Specifically, the invoice, which was dated June 26, 2001, indicated that PSLEI had purchased 120 units of Depo testosterone and 40 units of Decadurabolin from Farmacias Castaneda, which listed its address as Tijuana, Mexico. Gov. Exh. 22. Moreover, during the February 2002 trash run, the DIs found 50 empty boxes of a testosterone product that had been manufactured by Brovel, S.A., a Mexican firm. Tr. 709, Gov. Exh. 58. The ALJ concluded that the Government had failed to prove that Respondent “received imported controlled substances from Mexico,” apparently because the record “contains evidence that the owner of the Mexican pharmacy, Dr. Romero, may have shipped the controlled substances from a location in San Diego.” ALJ 75. The ALJ further explained that “[t]here are no shipping documents in the record to refute this evidence.” *Id.* Romero was not, however, a registered importer. And even accepting the ALJ's finding that the drugs may have been shipped to Respondent from a location in San Diego, I do not find persuasive the ALJ's reasoning that Respondent therefore did not engage in importation. Indeed, I conclude that the ALJ's reasoning is contrary to well settled authority and that adopting it would gut Federal drug laws. “Importation is a continuing crime that is not complete until the controlled substance reaches its final destination.” *United States* v. *Camargo-Vergara* , 57 F.3d 993, 1001 (11th Cir. 1995); *see also United States* v. *Martinez,* 763 F.2d 1297, 1304 (11th Cir. 1985). The fact that someone else brought the drugs across the border, or that the drugs were shipped from a way station within the United States, does not make the final intended recipient any less an importer. As the Fifth Circuit has explained, one “need not have participated directly in the physical movement of the [controlled substance] across the border to be convicted under 21 U.S.C. 952(a).” *United States* v. *Lopez-Escobar,* 920 F.2d 1241, 1245 (1991). Indeed, drug dealers frequently use third parties to smuggle controlled substances into this country. That does not make them any less an importer. Rather, the Government need only show that “the defendant knowingly played a role in bringing the substance from a foreign country into the United States,” *United States* v. *Jackson,* 55 F.3d 1219, 1225 (6th Cir. 1995); or that “the defendant either imported the substance or caused it to be imported.” *United States* v. *Nusraty,* 867 F.2d 759, 766 (2d Cir. 1989); *Accord United States* v. *Samad,* 754 F.2d 1091, 1096 (4th Cir. 1984). *See also United States* v. *Diaz-Carreon* 915 F.2d 951, 953 (5th Cir. 1990). The Government's proof satisfies either standard. The Farmacia Castaneda invoice clearly establishes that:

(1)Two controlled substances were shipped to Respondent, and

(2)that the source of the controlled substances was a Mexican based pharmacy notwithstanding that the substances may have been shipped from Mr. Romero's San Diego address. The invoice further establishes that

(3)Respondent caused the controlled substances to be imported by ordering them from the pharmacy. Finally, Respondent does not dispute that he received these two controlled substances but rather only whether the substances “came from San Diego, [and] not Mexico.” Resp. Proposed Findings at 14. The record thus contains substantial evidence that Respondent imported controlled substances. Under Federal law, “[n]o person may * * * import into the United States from any place outside thereof, any controlled substance * * * unless there is in effect with respect to such person a registration issued * * * under section 958 of this title” or the person “is exempt from registration under subsection(b).” 21 U.S.C. 957(a). Respondent was not registered as an importer, Gov. Exh. 2, and does fall within any of the three exemptions. *See* 21 U.S.C. 957(b). I thus conclude that Respondent violated federal law when he imported depo testosterone and decadurabolin from Mexico without being registered to do so. 21 21 I have reviewed Respondent's contention that these allegations should be dismissed because they were not alleged in the Order to Show Cause. While it is true that our regulations and the Administrative Procedure Act require that an Order to Show Cause contain “a summary of the matters of fact and law asserted,” 21 CFR 1301.37(c), an agency is not required “to give every [Respondent] a complete bill of particulars as to every allegation that [it] will confront.” *Boston Carrier, Inc.* v. *ICC,* 746 F.2d 1555, 1560 (D.C. Cir. 1984). Having reviewed the pre-hearing statements, I conclude that the Government gave Respondent fair notice that the import allegations would be raised and litigated. I further conclude that Respondent had “a meaningful opportunity to litigate the * * * issue in the hearing itself.” *NLRB* v. *Blake Construction Co., Inc.* , 663 F.2d 272, 279 (D.C. Cir. 1981). The Government's refusal to turn over FedEx documents that would have shown that the two controlled substances had been shipped from Romero's San Diego location did not deny Respondent a meaningful opportunity to litigate the issue; indeed, I accept that the steroids may have been shipped to Respondent from a San Diego address. *The Record Keeping Violations* The record further establishes that Respondent committed numerous recordkeeping violations. Beginning with the 1994-95 investigation, during the execution of the search warrant, none of the required records were found even though Respondent had purchased a variety of controlled substances included various anabolic steroids and diazepam. Moreover, on January 31, 2001, DEA visited Respondent's clinic and requested to see its controlled substance records. The invoices for the purchase of controlled substance were not on-site, but rather were at the office of the clinic's accountant. This violated 21 CFR 1304.04(a). Moreover, the inventory records and dispensing logs were stored in a computer system and no one was present at the clinic who could access them. Tr. 269. DEA regulations require that “each registered individual practitioner required to keep records” shall maintain the records “either separately from all other records of the registrant or in such form that the information required is readily retrievable from the ordinary business records of the registrant.” 21 CFR 1304.04(g) & (f)(2). As relevant here, DEA regulations define the term “readily retrievable” to mean “that certain records are kept by automatic data processing systems or other electronic or mechanized record-keeping systems in such a manner that they can be separated out from all other records *in a reasonable time* .” *Id.* § 1300.01(b)(38) (emphasis added). Respondent is correct that this regulation does not require that records be “instantaneously produced.” Resp. Br. 9. Moreover, the record does not indicate how long DEA personnel were at the clinic during the January 31, 2001 visit. Accordingly, there is no basis to conclude that the inventory and dispensing records were not readily retrievable on that date. I nonetheless note Respondent's argument that he “was not required to produce his records on the same day as the DEA's demand.” *Id.* at 17. This is so, Respondent contends, because “[n]either the statute nor the regulation prescribes a time limit within which a practitioner must produce his controlled substance records upon the DEA's request to examine them.” *Id.* The regulation does, however, require that records be retrievable in “a reasonable time.” While what constitutes “a reasonable time” necessarily depends on the circumstances, under normal circumstances if a practice is open for business, it should be capable of producing a complete set of records within several hours of the request. In this case, I conclude that on the second visit, the clinic's provision of the records within two to three hours complied with the regulation but barely so. To allow a registrant an even greater period of time to produce the records would create an incentive for those who are engaged in illegal activity to obstruct investigations by stalling for time in the hopes that DEA personnel would eventually give up and leave. Most significantly, the records that were provided did not comply with DEA's regulations. The “inventory report” was dated February 5, 2001. It did not include a DEA number for either Respondent or his associate and did not indicate that it had been done at the opening or closing of business. 21 CFR 1304.03(a) & 1304.11(a). Furthermore, the dispensing logs did not reflect the name of the dispensing registrant. *Id.* § 1304.03(b). Moreover, the logs covered only a period of approximately seven months and not the required two years. *Id.* § 1304.04(a). Finally, no invoices for testosterone were provided even though the other records clearly showed that the PSLEI had testosterone products on hand and was actively dispensing them. *Id.* § 1304.21(a). Nor were Respondent's recordkeeping violations limited to this time period. During the March 2002 Administrative Inspection, DEA personnel again requested to inspect Respondent's records including the required inventories. While Respondent was not available, the clinic could not provide the required inventories for the various controlled substances that were being dispensed. *See* ALJ 23. *Other Violations* The record contains evidence of further violations of DEA regulations during the period of Respondent's ownership. In March 2001, Respondent's clinic used Connie Chein's DEA number to order controlled substances even though Ms. Chein did not practice at the clinic and the clinic was not her registered location. *See* Gov. Exh. 45(a). This was a violation of 21 U.S.C. 843(a)(2) (prohibiting use of a registration number “issued to another person” for purpose of obtaining controlled substances). Moreover, Respondent's employees ordered controlled substances for the clinic using Dr. Garber's registration and had them shipped to Dr. Garber's residence, which was no longer a registered location. *See* Gov. Exh 45(b), (c),

(d)& (g). This conduct undermines the CSA's closed system of distribution which requires that a registrant maintain a registration at each place of business from where a registrant distributes controlled substances. 21 U.S.C. 822(e); 21 CFR 1301.12. Under DEA precedents, a registrant is responsible for violations of the CSA committed by his employees and his practice's failure to comply with the Act. *See Leonard Merkow* , 60 FR 22075, 22076 (1995). In conclusion, the evidence of Respondent's non-compliance with applicable laws related to controlled substances is extensive and shocking. Taken as a whole, Respondent's record reflects a flagrant disregard for the requirements of Federal law. Accordingly, I conclude that Respondent's continued registration as a practitioner would be inconsistent with the public interest. 22 22 I acknowledge that Respondent has not been convicted under either Federal or State law of a controlled substances offense. Given Respondent's extensive record of non-compliance with applicable laws, this factor is entitled to no weight. Moreover, because Respondent's record of violations is extensive enough to support the revocation of his registration, it is not necessary to discuss whether he engaged in other conduct which threatens public health and safety. Respondent's Export Application Section 1008 of the Controlled Substances Act provides that “[t]he Attorney General may deny an application for registration [to export controlled substances in schedule III or IV] * * * if he determines that such registration is inconsistent with the public interest * * * or with the United States obligation under international treaties, conventions, or protocols in effect on May 1, 1971.” 21 U.S.C. 958(d)(2). In making the public interest determination for an application to export Schedule III and IV controlled substances, Congress further directed that the Attorney General consider the factors applicable to manufacturers of Schedule III through V controlled substances. *Id.* section 958(c)(1). The factors are:

(1)Maintenance of effective controls against diversion of particular controlled substances and any controlled substance in schedule III, IV or V compounded therefrom into other than legitimate medical, scientific, or industrial channels;

(2)Compliance with applicable State and local law;

(3)Promotion of technical advances in the art of manufacturing these substances and the development of new substances;

(4)Prior conviction record of applicant under Federal or State laws relating to the manufacture, distribution, or dispensing of such substances;

(5)Past experience in the manufacture, distribution, and dispensing of controlled substances, and the existence in the establishment of effective controls against diversion; and

(6)Such other factors as may be relevant to and consistent with the public health and safety. 21 U.S.C. 823(d). As with the public interest determinations applicable to other categories of registrants, “these factors are * * * considered in the disjunctive.” *ALRA Laboratories, Inc.,* 59 FR 50620, 50621 (1994). I “may * * * rely on any one or a combination of factors, and give each factor the weight [I] deem appropriate” in considering whether to grant Respondent's application. *Id.* Moreover, case law establishes that I am “not required to make findings as to all of the factors.” *Hoxie* , 419 F.3d at 482. Here, while Congress has directed a slightly different analysis than that applicable to Respondent's practitioner's registration, I conclude that the same reasons that support the revocation of that registration also require the conclusion that granting Respondent's application for an export registration would be inconsistent with the public interest. There is no need to engage in a lengthy rehashing of those factors (such as Respondent's past experience and lack of compliance with Federal law) which have already been discussed; that discussion is therefore incorporated by reference. Both factors one and five inquire into whether an applicant has effective controls against diversion. Respondent clearly does not as demonstrated by his clinic's repeated failure to provide DEA with either initial or biennial inventories that complied with the regulations. Accurate inventories are essential to conduct accountability audits and to determine whether diversion has occurred. Respondent asserts that “[t]here was no diversion of controlled substances from the legitimate chain of distribution.” Resp. Br. 6. That is not so. The record contains abundant evidence that phentermine was sent to patients in Japan, Korea, and Taiwan. *See* Gov. Exh. 128. As demonstrated by a letter from a Japanese Ministry of Health official, it was illegal to export phentermine to Japan (although a person is allowed to bring in a small amount of the drug on his person). *See* Gov. Exh. 38(C). Furthermore, Taiwan had prohibited the use of phentermine and its importation. Finally, the record indicates that it is illegal to prescribe phentermine for anti-aging purposes in Korea and Japan. Both Japan and the United States have ratified the 1971 Convention on Psychotropic Substances, which regulates phentermine; the Republic of Korea has also become a party to the Convention by accession. 23 As explained above, under the Convention, the United States agreed to undertake certain measures including assisting other parties “in the campaign against the illicit traffic in psychotropic substances.” Convention on Psychotropic Substances Art. 21(b). 23 Taiwan was also a signatory to the Convention on Psychotropic Substances. It is acknowledged that Republic of China has declared Taiwan's ratification of the Convention to be null and void. In light of the authority that an export registration grants, as well as our treaty obligations, it is appropriate to consider the potential impact of Respondent's conduct not only on this country, but also on other parties to the Convention. 24 The statements of various government officials regarding the prohibition on the exportation of phentermine to their countries, as well as other evidence that it is illegal to prescribe phentermine for anti-aging purposes in several of these countries, establish that Respondent's exports of phentermine to foreign patients were not within the legitimate chain of distribution and were not for a legitimate medical purpose. The shipments thus establish that Respondent has engaged in diversion. I therefore conclude that Respondent's past experience in distributing and dispensing controlled substances demonstrates that his practice lacks effective controls against diversion—indeed, he is the cause of the diversion—and that this factor further supports a finding that granting Respondent's application would be inconsistent with the public interest. For the same reason, factor one supports a finding that granting Respondent's application would be inconsistent with the public interest. 24 *Noramco* v. *DEA,* 375 F.3d 1148, 1156 (D.C. Cir. 2004), is not to the contrary. That case involved an assertion by a competitor of a domestic manufacturer that granting the latter an importer's registration would lead to increased diversion of narcotic raw materials in India, the country of origin. *See Penick Corp., Inc.,* 68 FR 6947, 6951 (2003). While this assertion was entirely speculative, my predecessor further ruled that DEA was not required to consider the impact on diversion in the country of origin. *See id.* In affirming that interpretation as a reasonable construction of the statute, the court of appeals reasoned that “Congress was concerned with preventing diversion in this country rather than abroad.” 375 F.3d at 1156. Here, however, Federal law expressly requires that an exporter, before exporting any nonnarcotic controlled substance in schedules III or IV, “furnish” to DEA “documentary proof that importation is not contrary to the laws or regulations of the country of destination for consumption for medical, scientific, or other legitimate purposes.” 21 U.S.C. 953(e)(1). Thus, in contrast to the situation at issue in *Penick,* here, other provisions of the CSIEA suggest that in assessing Respondent's application, it is appropriate to consider the potential for diversion of the controlled substance in the destination country. The ALJ found that Respondent has promoted technical advances in the development of new substances (Factor 3) as demonstrated by his obtaining of several patents including one for his total hormone replacement therapy. *See* ALJ at 80. The ALJ further concluded that granting Respondent an export registration “would enhance his ability to continue to develop [the] therapy for his patients.” *Id.* I acknowledge that Respondent has obtained various patents for his treatment regimen and had applied for a patent for a particular testosterone composition. *See* Resp. Ex. 1016. Even so, Respondent's contributions in this area are greatly outweighed by his record of misconduct and his flagrant disregard for the requirements of federal law. This factor is thus entitled to no weight. I further note, however, that denying Respondent's application for an export registration (and revoking his practitioner's registration) does not preclude him from developing new treatment protocols. Respondent can continue to do so as long as he limits his research to non-controlled substances. Finally, in discussing other relevant factors (Factor 6), the ALJ found “that the public has an interest in the continued access to Respondent's total hormone replacement therapy,” and suggested that I could consider this in deciding whether to deny Respondent's application for an export registration (as well as to revoke his practitioner's registration). ALJ at 81. I need not decide whether this is an appropriate consideration under the statute because even if it is, Respondent's extensive history of misconduct clearly outweighs any benefit to the public that would accrue from allowing Respondent to handle controlled substances as either an exporter or practitioner. And in any event, Respondent can always license his patents to other physicians or offer to teach them his medical discoveries. Considering all of the factors, I conclude that Respondent's past experience in distributing and dispensing controlled substances is entitled to dispositive weight in the public interest determination applicable to his application for registration as an Exporter. Because that experience manifests a sustained and flagrant disregard for the requirements of Federal law, I conclude that granting Respondent's application would be inconsistent with the public interest. 25 25 Even if the Court of Appeals was to disagree with my finding that Respondent was still in charge of the Palm Springs clinic's dispensation of controlled substances during the period of his sister's putative ownership, the scope of his misconduct during the periods in which he owned the clinic is so extensive and egregious that I would still revoke his practitioner's registration and deny his exporter's application. Order Pursuant to the authority vested in me by 21 U.S.C. 823(f) & 824(a), as well as 28 CFR 0.100(b) & 0.104, I hereby order that DEA Certificate of Registration, AC1643661, issued to Edmund Chein, M.D., be, and it hereby is, revoked. I also order that any pending applications for renewal or modification of such registration be, and they hereby are, denied. Pursuant to the authority vested in me by 21 U.S.C. 958(d), as well as 28 CFR 0.100(b) & 0.104, I further order that the application of Edmund Chein, M.D., for a DEA Certificate of Registration as an Exporter of controlled substances be, and it hereby is, denied. Dated: January 19, 2007. Michele M. Leonhart, Deputy Administrator. [FR Doc. E7-2217 Filed 2-9-07; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF LABOR Employee Benefits Security Administration [Prohibited Transaction Exemption 2007-03; Exemption Application No. D-11381] Grant of Individual Exemption Involving The Bear Stearns Companies, Inc. (BS), Bear Stearns Asset Management Inc. (BSAM), and Bear, Stearns & Co. Inc.

(BSC)(Collectively, the Applicants) Located in New York, NY AGENCY: Employee Benefits Security Administration, U.S. Department of Labor. ACTION: Grant of individual exemption. SUMMARY: This document contains a final exemption issued by the Department of Labor (the Department) that provides relief from certain prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (the Act) and the Internal Revenue Code of 1986 (the Code). The exemption permits the purchase of certain securities (the Securities), by an asset management affiliate of BS from any person other than such asset management affiliate of BS or any affiliate thereof, during the existence of an underwriting or selling syndicate with respect to such Securities, where a broker-dealer affiliated with BS (the Affiliated Broker-Dealer) is a manager or member of such syndicate and the asset management affiliate of BS purchases such Securities, as a fiduciary:

(a)On behalf of an employee benefit plan or employee benefit plans (Client Plan(s)); or

(b)on behalf of Client Plans, and/or in-house plans (In-House Plans) which are invested in a pooled fund or in pooled funds (Pooled Fund(s)); provided certain conditions as set forth, below are satisfied (An affiliated underwriter transaction (AUT)). 1 The exemption affects Client Plans and In-House Plans and their participants and beneficiaries. 1 For purposes of this exemption an In-House Plan may engage in AUT's only through investment in a Pooled Fund. EFFECTIVE DATE: This exemption is effective as of the date it is published in the **Federal Register** . FOR FURTHER INFORMATION CONTACT: Angelena C. Le Blanc, Office of Exemption Determinations, Employee Benefits Security Administration, U.S. Department of Labor, telephone

(202)693-8540. (This is not a toll-free number.) SUPPLEMENTARY INFORMATION: On November 24, 2006, the Department published a Notice of Proposed Exemption (the Notice) in the **Federal Register** at 71 FR 67904. The document contained a proposed individual exemption from the restrictions of section 406 of the Act and section 4975(c)(1)(A) through

(F)of the Code. The proposed exemption had been requested in an application filed by the Applicants, pursuant to section 408(a) of the Act, and in accordance with the procedures set forth in 29 CFR Part 2570, Subpart B (55 FR 32836, August 10, 1990). Effective December 31, 1978, section 102 of Reorganization Plan No. 4 of 1978 (43 FR 47713, October 17, 1978) transferred the authority of the Secretary of the Treasury to issue exemptions of the type requested to the Secretary of Labor. Accordingly, this exemption is being issued solely by the Department. The proposed exemption gave interested persons an opportunity to comment and to request a hearing. In this regard, all interested persons were invited to submit written comments or requests for a hearing on the pending exemption on or before January 8, 2007. The Applicants informed the Department in a letter dated January 5, 2007, that the Notice along with the supplemental statement (the Supplemental Statement), described at 29 CFR 2570.43(b)(2) of the Department's regulations, was sent by December 9, 2006, via first class mail to all Interested Persons with the exception of two

(2)such Interested Persons. The Applicant further informed the Department that the Notice and the Supplemental Statement was sent by December 13, 2006, via first class mail to these two

(2)remaining Interested Persons. In light of the fact that notification to these Interested Persons was delayed and in order to allow such Interested Persons the benefit of the full thirty

(30)day comment period, the Department required, and the Applicants agreed to, an extension of the deadline within which these two

(2)Interested Persons could comment or request a hearing on the proposed exemption. In this regard, in accordance with the Department's instructions, the Applicants sent a letter on December 19, 2006, to these Interested Persons notifying them that the comment period was extended until January 15, 2007. All comments were made part of the record. During the comment period, the Department received no requests for a hearing. The Department did receive a comment letter from the Applicants. The written comments and the responses are discussed below. Written Comments In a letter dated, January 5, 2007, the Applicants’ suggested revisions of the language in paragraph 19 of the Summary of Facts and Representations, as published in the Notice at 71 FR 67907, column 1, lines 58-69, and column 2, lines 1-22, in order to reflect changes in the law regarding “hot issues.” The Department concurs with the Applicants' suggested revisions. In this regard, paragraph 19 of the Summary of Facts and Representations, as set forth in the Notice, should have read as follows: 19. Assuming that the marketing efforts have produced sufficient indications of interest, the Applicants represent that the issuer of the securities and the selling syndicate managers together will set the price of the securities and ask the SEC to declare the registration effective. After the registration statement becomes effective and the underwriting agreement is executed, the underwriters contact those investors that have indicated an interest in purchasing securities in the offering to execute the sales. The Applicants represent that offerings are often oversubscribed, and many have an over-allotment option that the underwriters can exercise to acquire additional shares from the issuer. Where an offering is oversubscribed, the underwriters decide how to allocate the securities among the potential purchasers. However, pursuant to the National Association of Securities Dealers Rule 2790, new issue securities (as defined under such rule) may not be sold directly to: Officers, directors, general partners or associated persons of any broker-dealer (other than limited business broker-dealers); any person who has the authority to buy or sell securities for: A bank, saving and loan institution, insurance and investment companies, investment advisors and collective investment accounts; and certain of the family members of such persons (collectively, “restricted persons”). Restricted persons may still participate, to a limited extent, in allocations of “new issues” through pooled investment vehicles in which they invest and may receive directly new issue allocations in certain other limited circumstances. In addition to the comment letter submitted by the Applicants, the Department received a telephone inquiry from a commentator seeking clarification of Section II(b) of the exemption. Section II(b), as set forth in the Notice, at 71 FR 67910, column 1, lines 31-55, reads as follows:

(b)The issuer of the Securities to be purchased has been in continuous operation for not less than three years, including the operation of any predecessors, unless—

(1)Such Securities are non-convertible debt securities rated in one of the four highest rating categories by at least one nationally recognized statistical rating organization, *i.e.* , Standard & Poor's Rating Services, Moody's Investors Service, Inc., Duff & Phelps Credit Rating Co., or Fitch IBCA, Inc., or their successors (collectively, the Rating Organizations); or

(2)Such Securities are issued or fully guaranteed by a person described, above, in Section II(a)(1)(i)(A); or

(3)Such Securities are fully guaranteed by a person described, above, in Section II(a)(1)(i)(B), (C), or (D), who has issued the Securities and who has been in continuous operation for not less than three years, including the operation of any predecessors. The Department has determined to amend the language of Section II(b), as set forth in this exemption, as follows:

(b)The issuer of the Securities to be purchased pursuant to this exemption must have been in continuous operation for not less than three years, including the operation of any predecessors, unless the Securities to be purchased —

(1)are non-convertible debt securities rated in one of the four highest rating categories by Standard & Poor's Rating Services, Moody's Investors Service, Inc., FitchRatings, Inc., Dominion Bond Rating Service Limited, Dominion Bond Rating Service, Inc., or any successors thereto (collectively, the Rating Organizations); provided that none of the Rating Organizations rates such securities in a category lower than the fourth highest rating category; or

(2)are debt securities issued or fully guaranteed by the United States or by any person controlled or supervised by and acting as an instrumentality of the United States pursuant to authority granted by the Congress of the United States; or

(3)are debt securities which are fully guaranteed by a person (the Guarantor) that has been in continuous operation for not less than three years, including the operation of any predecessors, provided that such Guarantor has issued other securities registered under the 1933 Act; or if such Guarantor has issued other securities which are exempt from such registration requirement, such Guarantor has been in continuous operation for not less than three years, including the operation of any predecessors, and such Guarantor:

(a)is a bank; or

(b)is an issuer of securities which are exempt from such registration requirement, pursuant to a Federal statute other than the 1933 Act; or

(c)is an issuer of securities that are the subject of a distribution and are of a class which is required to be registered under section 12 of the Securities Exchange Act of 1934 (the 1934 Act) (15 U.S.C. 781), and are issued by an issuer that has been subject to the reporting requirements of section 13 of the 1934 Act (15 U.S.C. 78m) for a period of at least ninety

(90)days immediately preceding the sale of such securities and that has filed all reports required to be filed thereunder with the Securities and Exchange Commission

(SEC)during the preceding twelve

(12)months. Further, the Department has amended the definition of Rating Organizations in Section III(k) of this exemption and has changed the reference to the Rating Organizations found in Section II(b)(1) of this exemption. In this regard, the Department has added Dominion Bond Rating Service Limited and Dominion Bond Rating Service, Inc. to the list of Rating Organizations. In addition, the Department has reflected the recent merger of Duff & Phelps Credit Rating Co. and Fitch IBCA, Inc., by including the name of the surviving organization, FitchRatings, Inc., and deleting Duff & Phelps Credit Rating Co. from the list of Rating Organizations. For further information regarding the comments or other matters discussed herein, interested persons are encouraged to obtain copies of the exemption application file (Exemption Application No. D-11381) the Department is maintaining in this case. The complete application file, as well as all supplemental submissions received by the Department, is made available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, Room N-1513, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210. Accordingly, after giving full consideration to the entire record, including the written comments received, the Department has decided to grant the exemption. General Information The attention of interested persons is directed to the following:

(1)The fact that a transaction is the subject of an exemption under section 408(a) of the Act does not relieve a fiduciary or other party in interest from certain other provisions of the Act, including any prohibited transaction provisions to which the exemption does not apply and the general fiduciary responsibility provisions of section 404 of the Act, which require, among other things, a fiduciary to discharge his or her duties respecting the plan solely in the interest of the participants and beneficiaries of the plan and in a prudent fashion in accordance with section 404(a)(1)(B) of the Act.

(2)The exemption does not extend to transactions prohibited under section 406(b)(3) of the Act.

(3)In accordance with section 408(a) of the Act, the Department makes the following determinations:

(a)The exemption is administratively feasible;

(b)The exemption is in the interest of the plans and of their participants and beneficiaries; and

(c)The exemption set forth herein is protective of the rights of participants and beneficiaries of the plans.

(4)The exemption is supplemental to, and not in derogation of, any other provisions of the Act, including statutory or administrative exemptions. Furthermore, the fact that a transaction is subject to an administrative or statutory exemption is not dispositive of whether the transaction is in fact a prohibited transaction. Accordingly, the following exemption is granted under the authority of section 408(a) of the Act and section 4975(c)(2) of the Code, and in accordance with the procedures set forth in 29 CFR Part 2570, Subpart B (55 FR 32836, 32847, August 10, 1990). Exemption Section I—Transactions The restrictions of section 406 of the Act and the sanctions resulting from the application of section 4975 of the Code, by reason of section 4975(c)(1)(A) through

(F)of the Code, shall not apply to the purchase of certain securities (the Securities), as defined, below in Section III(h), by an asset management affiliate of BS, as “affiliate” is defined, below, in Section III(c), from any person other than such asset management affiliate of BS or any affiliate thereof, during the existence of an underwriting or selling syndicate with respect to such Securities, where a broker-dealer affiliated with BS (the Affiliated Broker-Dealer), as defined, below, in Section III(b), is a manager or member of such syndicate and the asset management affiliate of BS purchases such Securities, as a fiduciary:

(a)On behalf of an employee benefit plan or employee benefit plans (Client Plan(s)), as defined, below, in Section III(e); or

(b)on behalf of Client Plans, and/or In-House Plans, as defined, below, in Section III(l), which are invested in a pooled fund or in pooled funds (Pooled Fund(s)), as defined, below, in Section III(f); provided that the conditions as set forth, below, in Section II, are satisfied (An affiliated underwriter transaction (AUT)). 2 2 For purposes of this exemption an In-House Plan may engage in AUT's only through investment in a Pooled Fund. Section II—Conditions The exemption is conditioned upon adherence to the material facts and representations described herein and upon satisfaction of the following requirements: (a)(1) The Securities to be purchased are either—

(i)Part of an issue registered under the Securities Act of 1933 (the 1933 Act) (15 U.S.C. 77a *et seq.* ). If the Securities to be purchased are part of an issue that is exempt from such registration requirement, such Securities:

(A)Are issued or guaranteed by the United States or by any person controlled or supervised by and acting as an instrumentality of the United States pursuant to authority granted by the Congress of the United States,

(B)Are issued by a bank,

(C)Are exempt from such registration requirement pursuant to a federal statute other than the 1933 Act, or

(D)Are the subject of a distribution and are of a class which is required to be registered under section 12 of the Securities Exchange Act of 1934 (the 1934 Act) (15 U.S.C. 781), and are issued by an issuer that has been subject to the reporting requirements of section 13 of the 1934 Act (15 U.S.C. 78m) for a period of at least ninety

(90)days immediately preceding the sale of such Securities and that has filed all reports required to be filed thereunder with the Securities and Exchange Commission

(SEC)during the preceding twelve

(12)months; or

(ii)Part of an issue that is an Eligible Rule 144A Offering, as defined in SEC Rule 10f-3 (17 CFR 270.10f-3(a)(4)). Where the Eligible Rule 144A Offering of the Securities is of equity securities, the offering syndicate shall obtain a legal opinion regarding the adequacy of the disclosure in the offering memorandum;

(2)The Securities to be purchased are purchased prior to the end of the first day on which any sales are made, pursuant to that offering, at a price that is not more than the price paid by each other purchaser of the Securities in that offering or in any concurrent offering of the Securities, except that—

(i)If such Securities are offered for subscription upon exercise of rights, they may be purchased on or before the fourth day preceding the day on which the rights offering terminates; or

(ii)If such Securities are debt securities, they may be purchased at a price that is not more than the price paid by each other purchaser of the Securities in that offering or in any concurrent offering of the Securities and may be purchased on a day subsequent to the end of the first day on which any sales are made, pursuant to that offering, provided that the interest rates, as of the date of such purchase, on comparable debt securities offered to the public subsequent to the end of the first day on which any sales are made and prior to the purchase date are less than the interest rate of the debt Securities being purchased; and

(3)The Securities to be purchased are offered pursuant to an underwriting or selling agreement under which the members of the syndicate are committed to purchase all of the Securities being offered, except if—

(i)Such Securities are purchased by others pursuant to a rights offering; or

(ii)Such Securities are offered pursuant to an over-allotment option.

(a)Is a bank; or

(b)is an issuer of securities which are exempt from such registration requirement, pursuant to a Federal statute other than the 1933 Act; or

(90)days immediately preceding the sale of such securities and that has filed all reports required to be filed thereunder with the Securities and Exchange Commission

(SEC)during the preceding twelve

(12)months.

(c)The aggregate amount of Securities of an issue purchased, pursuant to this exemption, by the asset management affiliate of BS with:

(i)the assets of all Client Plans; and

(ii)the assets, calculated on a *pro-rata* basis, of all Client Plans and In-House Plans investing in Pooled Funds managed by the asset management affiliate of BS; and

(iii)the assets of plans to which the asset management affiliate of BS renders investment advice within the meaning of 29 CFR 2510.3-21(c) does not exceed:

(1)10 percent (10%) of the total amount of the Securities being offered in an issue, if such Securities are equity securities;

(2)35 percent (35%) of the total amount of the Securities being offered in an issue, if such Securities are debt securities rated in one of the four highest rating categories by at least one of the Rating Organizations; provided that none of the Rating Organizations rates such Securities in a category lower than the fourth highest rating category; or

(3)25 percent (25%) of the total amount of the Securities being offered in an issue, if such Securities are debt securities rated in the fifth or sixth highest rating categories by at least one of the Rating Organizations; provided that none of the Rating Organizations rates such Securities in a category lower than the sixth highest rating category; and

(4)The assets of any single Client Plan (and the assets of any Client Plans and any In-House Plans investing in Pooled Funds) may not be used to purchase any Securities being offered, if such Securities are debt securities rated lower than the sixth highest rating category by any of the Rating Organizations;

(5)Notwithstanding the percentage of Securities of an issue permitted to be acquired, as set forth in Section II(c)(1), (2), and (3), above, of this exemption, the amount of Securities in any issue (whether equity or debt securities) purchased, pursuant to this exemption, by the asset management affiliate of BS on behalf of any single Client Plan, either individually or through investment, calculated on a *pro-rata* basis, in a Pooled Fund may not exceed three percent (3%) of the total amount of such Securities being offered in such issue, and;

(6)If purchased in an Eligible Rule 144A Offering, the total amount of the Securities being offered for purposes of determining the percentages, described, above, in Section II(c)(1)-(3) and (5), is the total of:

(i)The principal amount of the offering of such class of Securities sold by underwriters or members of the selling syndicate to “qualified institutional buyers” (QIBs), as defined in SEC Rule 144A (17 CFR 230.144A(a)(1)); plus

(ii)The principal amount of the offering of such class of Securities in any concurrent public offering.

(d)The aggregate amount to be paid by any single Client Plan in purchasing any Securities which are the subject of this exemption, including any amounts paid by any Client Plan or In-House Plan in purchasing such Securities through a Pooled Fund, calculated on a *pro-rata* basis, does not exceed three percent (3%) of the fair market value of the net assets of such Client Plan or In-House Plan, as of the last day of the most recent fiscal quarter of such Client Plan or In-House Plan prior to such transaction.

(e)The covered transactions are not part of an agreement, arrangement, or understanding designed to benefit the asset management affiliate of BS or an affiliate.

(f)The Affiliated Broker-Dealer does not receive, either directly, indirectly, or through designation, any selling concession, or other compensation or consideration that is based upon the amount of Securities purchased by any single Client Plan, or that is based on the amount of Securities purchased by Client Plans or In-House Plans through Pooled Funds, pursuant to this exemption. In this regard, the Affiliated Broker-Dealer may not receive, either directly or indirectly, any compensation or consideration that is attributable to the fixed designations generated by purchases of the Securities by the asset management affiliate of BS on behalf of any single Client Plan or any Client Plan or In-House Plan in Pooled Funds. (g)(1) The amount the Affiliated Broker-Dealer receives in management, underwriting, or other compensation or consideration is not increased through an agreement, arrangement, or understanding for the purpose of compensating the Affiliated Broker-Dealer for foregoing any selling concessions for those Securities sold pursuant to this exemption. Except as described above, nothing in this Section II(g)(1) shall be construed as precluding the Affiliated Broker-Dealer from receiving management fees for serving as manager of the underwriting or selling syndicate, underwriting fees for assuming the responsibilities of an underwriter in the underwriting or selling syndicate, or other compensation or consideration that is not based upon the amount of Securities purchased by the asset management affiliate of BS on behalf of any single Client Plan, or on behalf of any Client Plan or In-House Plan participating in Pooled Funds, pursuant to this exemption; and

(2)The Affiliated Broker-Dealer shall provide to the asset management affiliate of BS a written certification, signed by an officer of the Affiliated Broker-Dealer, stating the amount that the Affiliated Broker-Dealer received in compensation or consideration during the past quarter, in connection with any offerings covered by this exemption, was not adjusted in a manner inconsistent with Section II(e), (f), or

(g)of this exemption.

(h)The covered transactions are performed under a written authorization executed in advance by an independent fiduciary of each single Client Plan (the Independent Fiduciary), as defined, below, in Section III(g).

(i)Prior to the execution by an Independent Fiduciary of a single Client Plan of the written authorization described, above, in Section II(h), the following information and materials (which may be provided electronically) must be provided by the asset management affiliate of BS to such Independent Fiduciary:

(1)A copy of the Notice of Proposed Exemption (the Notice) and a copy of the final exemption as published in the **Federal Register** ; and

(2)Any other reasonably available information regarding the covered transactions that such Independent Fiduciary requests the asset management affiliate of BS to provide.

(j)Subsequent to the initial authorization by an Independent Fiduciary of a single Client Plan permitting the asset management affiliate of BS to engage in the covered transactions on behalf of such single Client Plan, the asset management affiliate of BS will continue to be subject to the requirement to provide within a reasonable period of time any reasonably available information regarding the covered transactions that the Independent Fiduciary requests the asset management affiliate of BS to provide. (k)(1) In the case of an existing employee benefit plan investor (or existing In-House Plan investor, as the case may be) in a Pooled Fund, such Pooled Fund may not engage in any covered transactions pursuant to this exemption, unless the asset management affiliate of BS provides the written information, as described, below, and within the time period described, below, in this Section II(k)(2), to the Independent Fiduciary of each such plan participating in such Pooled Fund (and to the fiduciary of each such In-House Plan participating in such Pooled Fund).

(2)The following information and materials (which may be provided electronically) shall be provided by the asset management affiliate of BS not less than 45 days prior to such asset management affiliate of BS engaging in the covered transactions on behalf of a Pooled Fund, pursuant to this exemption:

(i)A notice of the intent of such Pooled Fund to purchase Securities pursuant to this exemption, a copy of this Notice, and a copy of the final exemption, as published in the **Federal Register** ;

(ii)Any other reasonably available information regarding the covered transactions that the Independent Fiduciary of a plan (or fiduciary of an In-House Plan) participating in a Pooled Fund requests the asset management affiliate of BS to provide; and

(iii)A termination form expressly providing an election for the Independent Fiduciary of a plan (or fiduciary of an In-House Plan) participating in a Pooled Fund to terminate such plan's (or In-House Plan's) investment in such Pooled Fund without penalty to such plan (or In-House Plan). Such form shall include instructions specifying how to use the form. Specifically, the instructions will explain that such plan (or such In-House Plan) has an opportunity to withdraw its assets from a Pooled Fund for a period of no more than 30 days after such plan's (or such In-House Plan's) receipt of the initial notice of intent, described, above, in Section II(k)(2)(i), and that the failure of the Independent Fiduciary of such plan (or fiduciary of such In-House Plan) to return the termination form to the asset management affiliate of BS in the case of a plan (or In-House Plan) participating in a Pooled Fund by the specified date shall be deemed to be an approval by such plan (or such In-House Plan) of its participation in the covered transactions as an investor in such Pooled Fund. Further, the instructions will identify BS, the asset management affiliate of BS, and the Affiliated Broker-Dealer and will provide the address of the asset management affiliate of BS. The instructions will state that this exemption may be unavailable, unless the fiduciary of each plan participating in the covered transactions as an investor in a Pooled Fund is, in fact, independent of BS, the asset management affiliate of BS, and the Affiliated Broker-Dealer. The instructions will also state that the fiduciary of each such plan must advise the asset management affiliate of BS, in writing, if it is not an “Independent Fiduciary,” as that term is defined, below, in Section III(g). For purposes of this Section II(k), the requirement that the fiduciary responsible for the decision to authorize the transactions described, above, in Section I of this exemption for each plan be independent of the asset management affiliate of BS shall not apply in the case of an In-House Plan. (l)(1) In the case of each plan (and in the case of each In-House Plan) whose assets are proposed to be invested in a Pooled Fund after such Pooled Fund has satisfied the conditions set forth in this exemption to engage in the covered transactions, the investment by such plan (or by such In-House Plan) in the Pooled Fund is subject to the prior written authorization of an Independent Fiduciary representing such plan (or the prior written authorization by the fiduciary of such In-House Plan, as the case may be), following the receipt by such Independent Fiduciary of such plan (or by the fiduciary of such In-House Plan, as the case may be) of the written information described, above, in Section II(k)(2)(i) and (ii).

(2)For purposes of this Section II(l), the requirement that the fiduciary responsible for the decision to authorize the transactions described, above, in Section I of this exemption for each plan proposing to invest a Pooled Fund be independent of BS and its affiliates shall not apply in the case of an In-House Plan.

(m)Subsequent to the initial authorization by an Independent Fiduciary of a plan (or by a fiduciary of an In-House Plan) to invest in a Pooled Fund that engages in the covered transactions, the asset management affiliate of BS will continue to be subject to the requirement to provide within a reasonable period of time any reasonably available information regarding the covered transactions that the Independent Fiduciary of such plan (or the fiduciary of such In-House Plan, as the case may be) requests the asset management affiliate of BS to provide.

(n)At least once every three months, and not later than 45 days following the period to which such information relates, the asset management affiliate of BS shall furnish:

(1)In the case of each single Client Plan that engages in the covered transactions, the information described, below, in this Section II(n)(3)-(7), to the Independent Fiduciary of each such single Client Plan.

(2)In the case of each Pooled Fund in which a Client Plan (or in which an In-House Plan) invests, the information described, below, in this Section II(n)(3)-(6) and (8), to the Independent Fiduciary of each such Client Plan (and to the fiduciary of each such In-House Plan) invested in such Pooled Fund.

(3)A quarterly report (the Quarterly Report) (which may be provided electronically) which discloses all the Securities purchased pursuant to the exemption during the period to which such report relates on behalf of the Client Plan, In-House Plan, or Pooled Fund to which such report relates, and which discloses the terms of each of the transactions described in such report, including:

(i)The type of Securities (including the rating of any Securities which are debt securities) involved in each transaction;

(ii)The price at which the Securities were purchased in each transaction;

(iii)The first day on which any sale was made during the offering of the Securities;

(iv)The size of the issue of the Securities involved in each transaction;

(v)The number of Securities purchased by the asset management affiliate of BS for the Client Plan, In-House Plan, or Pooled Fund to which the transaction relates;

(vi)The identity of the underwriter from whom the Securities were purchased for each transaction;

(vii)The underwriting spread in each transaction ( *i.e.* , the difference, between the price at which the underwriter purchases the securities from the issuer and the price at which the securities are sold to the public);

(viii)The price at which any of the Securities purchased during the period to which such report relates were sold; and

(ix)The market value at the end of the period to which such report relates of the Securities purchased during such period and not sold;

(4)The Quarterly Report contains:

(i)A representation that the asset management affiliate of BS has received a written certification signed by an officer of the Affiliated Broker-Dealer, as described, above, in Section II(g)(2), affirming that, as to each AUT covered by this exemption during the past quarter, the Affiliated Broker-Dealer acted in compliance with Section II(e), (f), and

(g)of this exemption, and

(ii)a representation that copies of such certifications will be provided upon request;

(5)A disclosure in the Quarterly Report that states that any other reasonably available information regarding a covered transaction that an Independent Fiduciary (or fiduciary of an In-House Plan) requests will be provided, including, but not limited to:

(i)The date on which the Securities were purchased on behalf of the Client Plan (or the In-House Plan) to which the disclosure relates (including Securities purchased by Pooled Funds in which such Client Plan (or such In-House Plan) invests;

(ii)The percentage of the offering purchased on behalf of all Client Plans (and the *pro-rata* percentage purchased on behalf of Client Plans and In-House Plans investing in Pooled Funds); and

(iii)The identity of all members of the underwriting syndicate;

(6)The Quarterly Report discloses any instance during the past quarter where the asset management affiliate of BS was precluded for any period of time from selling Securities purchased under this exemption in that quarter because of its status as an affiliate of an Affiliated Broker-Dealer and the reason for this restriction;

(7)Explicit notification, prominently displayed in each Quarterly Report sent to the Independent Fiduciary of each single Client Plan that engages in the covered transactions that the authorization to engage in such covered transactions may be terminated, without penalty to such single Client Plan, within five

(5)days after the date that the Independent Fiduciary of such single Client Plan informs the person identified in such notification that the authorization to engage in the covered transactions is terminated; and

(8)Explicit notification, prominently displayed in each Quarterly Report sent to the Independent Fiduciary of each Client Plan (and to the fiduciary of each In-House Plan) that engages in the covered transactions through a Pooled Fund that the investment in such Pooled Fund may be terminated, without penalty to such Client Plan (or such In-House Plan), within such time as may be necessary to effect the withdrawal in an orderly manner that is equitable to all withdrawing plans and to the non-withdrawing plans, after the date that that the Independent Fiduciary of such Client Plan (or the fiduciary of such In-House Plan, as the case may be) informs the person identified in such notification that the investment in such Pooled Fund is terminated.

(o)For purposes of engaging in covered transactions, each Client Plan (and each In-House Plan) shall have total net assets with a value of at least $50 million (the $50 Million Net Asset Requirement). For purposes of engaging in covered transactions involving an Eligible Rule 144A Offering, 3 each Client Plan (and each In-House Plan) shall have total net assets of at least $100 million in securities of issuers that are not affiliated with such Client Plan (or such In-House Plan, as the case may be) (the $100 Million Net Asset Requirement). 3 SEC Rule 10f-3(a)(4), 17 CFR 270.10f-3(a)(4), states that the term “Eligible Rule 144A Offering” means an offering of securities that meets the following conditions:

(i)The securities are offered or sold in transactions exempt from registration under section 4(2) of the Securities Act of 1933 [15 U.S.C. 77d(d)], rule 144A thereunder [§ 230.144A of this chapter], or rules 501-508 thereunder [§§ 230.501-230-508 of this chapter];

(ii)The securities are sold to persons that the seller and any person acting on behalf of the seller reasonably believe to include qualified institutional buyers, as defined in § 230.144A(a)(1) of this chapter; and

(iii)The seller and any person acting on behalf of the seller reasonably believe that the securities are eligible for resale to other qualified institutional buyers pursuant to § 230.144A of this chapter. For purposes of a Pooled Fund engaging in covered transactions, each Client Plan (and each In-House Plan) in such Pooled Fund shall have total net assets with a value of at least $50 million. Notwithstanding the foregoing, if each such Client Plan (and each such In-House Plan) in such Pooled Fund does not have total net assets with a value of at least $50 million, the $50 Million Net Asset Requirement will be met, if 50 percent (50%) or more of the units of beneficial interest in such Pooled Fund are held by Client Plans (or by In-House Plans) each of which has total net assets with a value of at least $50 million. For purposes of a Pooled Fund engaging in covered transactions involving an Eligible Rule 144A Offering, each Client Plan (and each In-House Plan) in such Pooled Fund shall have total net assets of at least $100 million in securities of issuers that are not affiliated with such Client Plan (or such In-House Plan, as the case may be). Notwithstanding the foregoing, if each such Client Plan (and each such In-House Plan) in such Pooled Fund does not have total net assets of at least $100 million in securities of issuers that are not affiliated with such Client Plan (or In-House Plan, as the case may be), the $100 Million Net Asset Requirement will be met if 50 percent (50%) or more of the units of beneficial interest in such Pooled Fund are held by Client Plans (or by In-House Plans) each of which have total net assets of at least $100 million in securities of issuers that are not affiliated with such Client Plan (or such In-House Plan, as the case may be), and the Pooled Fund itself qualifies as a QIB, as determined pursuant to SEC Rule 144A (17 CFR 230.144A(a)(F)). For purposes of the net asset requirements described, above, in this Section II(o), where a group of Client Plans is maintained by a single employer or controlled group of employers, as defined in section 407(d)(7) of the Act, the $50 Million Net Asset Requirement (or in the case of an Eligible Rule 144A Offering, the $100 Million Net Asset Requirement) may be met by aggregating the assets of such Client Plans, if the assets of such Client Plans are pooled for investment purposes in a single master trust.

(p)The asset management affiliate of BS qualifies as a “qualified professional asset manager” (QPAM), as that term is defined under Part V(a) of PTE 84-14. Notwithstanding the fact that the asset management affiliate of BS satisfies the requirements, as set forth in Part V(a) of PTE 84-14, such asset management affiliate of BS must also have total client assets under its management and control in excess of $5 billion, as of the last day of it most recent fiscal year and shareholders' or partners' equity in excess of $1 million. Furthermore, the requirement that the asset management affiliate of BS must have total client asset under its management and control in excess of $5 billion, as of the last day of it most recent fiscal year and shareholders' or partners' equity in excess of $1 million, as set forth in this Section II(p), applies whether such asset management affiliate of BS, qualifies as a QPAM, pursuant to Part V(a)(1), (a)(2), (a)(3) or (a)(4) of PTE 84-14.

(q)No more than 20 percent of the assets of a Pooled Fund, at the time of a covered transaction, are comprised of assets of In-House Plans for which BS, the asset management affiliate of BS, the Affiliated Broker-Dealer, or an affiliate exercises investment discretion.

(r)The asset management affiliate of BS, and the Affiliated Broker-Dealer, as applicable, maintain, or cause to be maintained, for a period of six

(6)years from the date of any covered transaction such records as are necessary to enable the persons, described, below, in Section II(s), to determine whether the conditions of this exemption have been met, except that—

(1)No party in interest with respect to a plan which engages in the covered transactions, other than BS, the asset management affiliate of BS, and the Affiliated Broker-Dealer, as applicable, shall be subject to a civil penalty under section 502(i) of the Act or the taxes imposed by section 4975(a) and

(b)of the Code, if such records are not maintained, or not available for examination, as required, below, by Section II(s); and

(2)A prohibited transaction shall not be considered to have occurred if, due to circumstances beyond the control of the asset management affiliate of BS, or the Affiliated Broker-Dealer, as applicable, such records are lost or destroyed prior to the end of the six-year period. (s)(1) Except as provided, below, in Section II(s)(2), and notwithstanding any provisions of subsections (a)(2) and

(b)of section 504 of the Act, the records referred to, above, in Section II(r) are unconditionally available at their customary location for examination during normal business hours by —

(i)Any duly authorized employee or representative of the Department, the Internal Revenue Service, or the SEC; or

(ii)Any fiduciary of any plan that engages in the covered transactions, or any duly authorized employee or representative of such fiduciary; or

(iii)Any employer of participants and beneficiaries and any employee organization whose members are covered by a plan that engages in the covered transactions, or any authorized employee or representative of these entities; or

(iv)Any participant or beneficiary of a plan that engages in the covered transactions, or duly authorized employee or representative of such participant or beneficiary;

(2)None of the persons described, above, in Section II(s)(1)(ii)—(iv) shall be authorized to examine trade secrets of the asset management affiliate of BS, or the Affiliated Broker-Dealer, or commercial or financial information which is privileged or confidential; and

(3)Should the asset management affiliate of BS, or the Affiliated Broker-Dealer refuse to disclose information on the basis that such information is exempt from disclosure, pursuant to Section II(s)(2), above, the asset management affiliate of BS shall, by the close of the thirtieth

(30th)day following the request, provide a written notice advising that person of the reasons for the refusal and that the Department may request such information. Section III—Definitions

(a)The term, “the Applicants,” means BS, BSAM, and BSC.

(b)The term, “Affiliated Broker-Dealer,” means any broker-dealer affiliate, as “affiliate” is defined, below, in Section III(c), of the Applicants, as “Applicants” are defined, above, in Section III(a), that meets the requirements of this exemption. Such Affiliated Broker-Dealer may participate in an underwriting or selling syndicate as a manager or member. The term, “manager,” means any member of an underwriting or selling syndicate who, either alone or together with other members of the syndicate, is authorized to act on behalf of the members of the syndicate in connection with the sale and distribution of the Securities, as defined, below, in Section III(h), being offered or who receives compensation from the members of the syndicate for its services as a manager of the syndicate.

(c)The term “affiliate” of a person includes:

(1)Any person directly or indirectly through one or more intermediaries, controlling, controlled by, or under common control with such person;

(2)Any officer, director, partner, employee, or relative, as defined in section 3(15) of the Act, of such person; and

(3)Any corporation or partnership of which such person is an officer, director, partner, or employee.

(d)The term, “control,” means the power to exercise a controlling influence over the management or policies of a person other than an individual.

(e)The term, “Client Plan(s),” means an employee benefit plan(s) that is subject to the Act and/or the Code, and for which plan(s) an asset management affiliate of BS exercises discretionary authority or discretionary control respecting management or disposition of some or all of the assets of such plan(s), but excludes In-House Plans, as defined, below, in Section III(l).

(f)The term, “Pooled Fund(s),” means a common or collective trust fund(s) or a pooled investment fund(s):

(i)in which employee benefit plan(s) subject to the Act and/or Code invest,

(ii)which is maintained by an asset management affiliate of BS, (as the term, “affiliate” is defined, above, in Section III(c)), and

(iii)for which such asset management affiliate of BS exercises discretionary authority or discretionary control respecting the management or disposition of the assets of such fund(s). (g)(1) The term, “Independent Fiduciary,” means a fiduciary of a plan who is unrelated to, and independent of BS, the asset management affiliate of BS, and the Affiliated Broker-Dealer. For purposes of this exemption, a fiduciary of a plan will be deemed to be unrelated to, and independent of BS, the asset management affiliate of BS, and the Affiliated Broker-Dealer, if such fiduciary represents that neither such fiduciary, nor any individual responsible for the decision to authorize or terminate authorization for the transactions described, above, in Section I of this exemption, is an officer, director, or highly compensated employee (within the meaning of section 4975(e)(2)(H) of the Code) of BS, the asset management affiliate of BS, or the Affiliated Broker-Dealer, and represents that such fiduciary shall advise the asset management affiliate of BS within a reasonable period of time after any change in such facts occur.

(2)Notwithstanding anything to the contrary in this Section III(g), a fiduciary of a plan is not independent:

(i)If such fiduciary directly or indirectly controls, is controlled by, or is under common control with BS, the asset management affiliate of BS, or the Affiliated Broker-Dealer;

(ii)If such fiduciary directly or indirectly receives any compensation or other consideration from BS, the asset management affiliate of BS, or the Affiliated Broker-Dealer for his or her own personal account in connection with any transaction described in this exemption;

(iii)If any officer, director, or highly compensated employee (within the meaning of section 4975(e)(2)(H) of the Code) of the asset management affiliate of BS responsible for the transactions described, above, in Section I of this exemption, is an officer, director, or highly compensated employee (within the meaning of section 4975(e)(2)(H) of the Code) of the sponsor of the plan or of the fiduciary responsible for the decision to authorize or terminate authorization for the transactions described, above, in Section I. However, if such individual is a director of the sponsor of the plan or of the responsible fiduciary, and if he or she abstains from participation in:

(A)The choice of the plan's investment manager/adviser; and

(B)the decision to authorize or terminate authorization for transactions described, above, in Section I, then Section III(g)(2)(iii) shall not apply.

(3)The term, “officer,” means a president, any vice president in charge of a principal business unit, division, or function (such as sales, administration, or finance), or any other officer who performs a policy-making function for BS or any affiliate thereof.

(h)The term, “Securities,” shall have the same meaning as defined in section 2(36) of the Investment Company Act of 1940 (the 1940 Act), as amended (15 U.S.C. 80a-2(36)(1996)). For purposes of this exemption, mortgage-backed or other asset-backed securities rated by one of the Rating Organizations, as defined, below, in Section III(k), will be treated as debt securities.

(i)The term, “Eligible Rule 144A Offering,” shall have the same meaning as defined in SEC Rule 10f-3(a)(4) (17 CFR 270. 10f-3(a)(4)) under the 1940 Act.

(j)The term, “qualified institutional buyer,” or the term, “QIB,” shall have the same meaning as defined in SEC Rule 144A (17 CFR 230.144A(a)(1)) under the 1933 Act.

(k)The term, “Rating Organizations,” means Standard & Poor's Rating Services, Moody's Investors Service, Inc., FitchRatings, Inc., Dominion Bond Rating Service Limited, and Dominion Bond Rating Service, Inc.; or any successors thereto.

(l)The term, “In-House Plan(s),” means an employee benefit plan(s) that is subject to the Act and/or the Code, and that is sponsored by the Applicants, as defined, above, in Section III(a) for their own employees. The availability of this exemption is subject to the express condition that the material facts and representations contained in the application for exemption are true and complete and accurately describe all material terms of the transactions. In the case of continuing transactions, if any of the material facts or representations described in the applications change, the exemption will cease to apply as of the date of such change. In the event of any such change, an application for a new exemption must be made to the Department. Signed at Washington, DC, this 6th day of February, 2007. Ivan L. Strasfeld, Director of Exemption Determinations, Employee Benefits Security Administration, U.S. Department of Labor. [FR Doc. E7-2242 Filed 2-9-07; 8:45 am] BILLING CODE 4510-29-P DEPARTMENT OF LABOR Employment and Training Administration [TA-W-60,756] Eramet Marietta; Marietta, OH; Notice of Termination of Investigation Pursuant to Section 221 of the Trade Act of 1974, as amended, an investigation was initiated on January 12, 2007 in response to a petition filed by the United Steel Workers, Local 1-00639-01, on behalf of workers at Eramet Marietta, Marietta, Ohio. The petitioner has requested that the petition be withdrawn. Consequently, the investigation has been terminated. Signed in Washington, DC, this 5th day of February 2007. Linda G. Poole, Certifying Officer, Division of Trade Adjustment Assistance. [FR Doc. E7-2286 Filed 2-9-07; 8:45 am] BILLING CODE 4510-FN-P DEPARTMENT OF LABOR Employment and Training Administration [TA-W-60,776] Kirchner Corporation; Golden Valley, MN; Notice of Termination of Investigation Pursuant to Section 221 of the Trade Act of 1974, as amended, an investigation was initiated on January 17, 2007, in response to a worker petition filed by the Service Employees International Union, Local 26, on behalf of workers at Kirchner Corporation, Golden Valley, Minnesota. The petitioning group of workers is covered by an active certification (TA-W-60,722) which expires on January 22, 2009. Consequently, further investigation in this case would serve no purpose, and the investigation has been terminated. Signed at Washington, DC this 2nd day of February 2007. Elliott S. Kushner, Certifying Officer, Division of Trade Adjustment Assistance. [FR Doc. E7-2283 Filed 2-9-07; 8:45 am] BILLING CODE 4510-FN-P DEPARTMENT OF LABOR Employment and Training Administration [TA-W-58,808] Lexmark International, Inc.; Supply Chain Workforce Printing Solutions And Services Division; Lexington, KY; Notice of Revised Determination on Remand On December 8, 2006, the U.S. Court of International Trade (USCIT) granted the U.S. Department of Labor's motion for a voluntary remand in *Former Employees of Lexmark International, Inc.* v. *United States* , Court No. 06-00327. On February 7, 2006, three workers filed a petition for Trade Adjustment Assistance

(TAA)and Alternative Trade Adjustment Assistance

(ATAA)on behalf of workers and former workers of Lexmark International, Inc., Supply Chain Workforce, Printing Solutions and Services Division, Lexington, Kentucky (subject facility). The petitioners stated that the subject facility produced “printers and supplies” and attached an article which stated that Lexmark International, Inc. (Lexmark) planned to move jobs abroad to countries where Lexmark has existing ink cartridge production facilities, including Mexico, China, and the Philippines (“Lexmark benefits from its plans to trim jobs,” Bloomberg News, January 25, 2006). In the negative determination, the Department stated that the subject workers did not work directly in the manufacture of the products made by Lexmark. The determination also stated that the predominant cause of worker separations was not a shift of production abroad but was Lexmark's decision to position support tasks closer to where Lexmark's manufacturing partners and customers are located worldwide, including Mexico and the Philippines. The Department's Notice of determination applicable to the subject facility was issued on February 24, 2006. The Department's Notice of determination was published in the **Federal Register** on March 22, 2006 (71 FR 14550). On March 25, 2006, a worker requested administrative reconsideration of the Department's determination. In the request for reconsideration, the worker alleged that the subject workers supported the production of ink and printer cartridges produced by Lexmark and inferred that support activities were shifted overseas when production shifted abroad. The Department issued a Notice of Affirmative Determination Regarding Application for Reconsideration applicable to the subject facility on April 13, 2006. On April 24, 2006, the Department's Notice of determination was published in the **Federal Register** (71 FR 21042). During the reconsideration investigation, the Department determined that the subject workers are an integral part of ink and printer cartridge production and are not separately identifiable by product line. However, because the Department was repeatedly informed by the subject firm that neither the subject facility nor Lexmark produced ink or cartridges domestically during the relevant period, the Department determined that the subject workers are not employed by a company covered by the statute and, therefore, are not eligible to apply for TAA because the subject workers were not employed by a firm (or an appropriate subdivision) which produced an article domestically during the relevant period. The Department's Notice of Negative Determination on Reconsideration applicable to the subject facility was issued on July 19, 2006. The Department's Notice of determination was published in the **Federal Register** on July 31, 2006. On September 19, 2006, the Plaintiff filed a complaint with the USCIT. In the complaint, the Plaintiff alleged that the Department's determination was based on the erroneous finding that “Lexmark did not produce ink or cartridges domestically during the twelve-month period prior to the petition date.” After careful review of the Plaintiff's complaint and the administrative record, prepared in response to the complaint, the Department filed a motion for voluntary remand. On December 8, 2006, the USCIT granted the Department's motion for voluntary remand to conduct further investigation and to make a redetermination regarding the Plaintiffs' eligibility to apply for worker adjustment assistance (TAA and ATAA). In order to make an affirmative determination and issue a certification of eligibility to apply for TAA, the group eligibility requirements in either paragraph (a)(2)(A) or (a)(2)(B) of Section 222 of the Trade Act must be met. It is determined in this case that the requirements of (a)(2)(B) of Section 222 have been met. During the remand investigation, the Department reviewed the administrative record, contacted Plaintiff's counsel, and requested additional information and clarification from Lexmark. During the remand investigation, the Department obtained new information which revealed that, contrary to information previously-submitted by Lexmark, the subject facility produced ink and that the subject firm shifted ink production from the subject facility to existing foreign inkjet cartridge production facilities, including facilities in Mexico, during the relevant period, and that a significant proportion of the workforce at the subject facility was separated. In accordance with Section 246 the Trade Act of 1974 (26 U.S.C. 2813), as amended, the Department herein presents the results of its investigation regarding certification of eligibility to apply for ATAA for older workers. In order for the Department to issue a certification of eligibility to apply for ATAA, the group eligibility requirements of Section 246 of the Trade Act must be met. The Department has determined in the case at hand that the requirements of Section 246 have been met. A significant number of workers at the firm are age 50 or over and possess skills that are not easily transferable. Competitive conditions within the industry are adverse. Conclusion After careful review of the facts generated through the remand investigation, I determine that a shift of production to Mexico of articles like or directly competitive with ink produced at the subject facility contributed to the total or partial separation of a significant number or proportion of workers at the subject facility. In accordance with the provisions of the Act, I make the following certification: All workers of Lexmark International, Inc., Supply Chain Workforce, Printing Solutions and Services Division, Lexington, Kentucky, who became totally or partially separated from employment on or after February 7, 2005, through two years from the issuance of this revised determination, are eligible to apply for Trade Adjustment Assistance under Section 223 of the Trade Act of 1974, and are eligible to apply for Alternative Trade Adjustment Assistance under Section 246 of the Trade Act of 1974, as amended. Signed at Washington, DC this 5th day of February 2007. Elliott S. Kushner, Certifying Officer, Division of Trade Adjustment Assistance. [FR Doc. E7-2284 Filed 2-9-07; 8:45 am] BILLING CODE 4510-FN-P DEPARTMENT OF LABOR Employment and Training Administration [TA-W-60,140] Tap Holdings, LLC; Los Angeles, CA; Notice of Negative Determination Regarding Application for Reconsideration By application postmarked December 18, 2006, petitioners requested administrative reconsideration of the Department's negative determination regarding eligibility to apply for Trade Adjustment Assistance (TAA), applicable to workers and former workers of the subject firm. The denial notice was signed on November 16, 2006 and published in the **Federal Register** on November 28, 2006 (71 FR 68841). Pursuant to 29 CFR 90.18(c) reconsideration may be granted under the following circumstances:

(1)If it appears on the basis of facts not previously considered that the determination complained of was erroneous;

(2)If it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or

(3)If in the opinion of the Certifying Officer, a mis-interpretation of facts or of the law justified reconsideration of the decision. The petition for the workers of TAP Holdings, LLC, Los Angeles, California engaged in production of re-manufactured carburetors and throttle body injection units was denied because the “contributed importantly” group eligibility requirement of Section 222 of the Trade Act of 1974, as amended, was not met, nor was there a shift in production from that firm to a foreign country in 2004, 2005 or January through August, 2006. The “contributed importantly” test is generally demonstrated through a survey of the workers' firm's customers. The survey revealed no imports of re-manufactured carburetors and throttle body injection units during the relevant period. The subject firm did not import re-manufactured carburetors and throttle body injection units nor did it shift production to a foreign country during the relevant period. The petitioner states that the subject firm lost its business producing carburetors as a direct result of the increasing presence of electronic fuel injectors in the automobile industry. The petitioner also states that imports of electronic fuel injectors have increased and thus workers of the subject firm who manufacture re-manufactured carburetors and throttle body injection units should be eligible for TAA. In order to establish import impact, the Department must consider imports that are like or directly competitive with those produced at the subject firm. The Department conducted a survey of the subject firm's major declining customers regarding their purchases of re-manufactured carburetors and throttle body injection units. The survey revealed that the declining customers did not increase their imports of re-manufactured carburetors and throttle body injection units during the relevant period. The petitioner also requested that workers of TAP Holdings, LLC, Los Angeles, California be considered eligible for TAA as a secondary affected company. The petitioner provided a list of TAA certified companies to which the subject firm allegedly supplied components during the relevant time period. For certification on the basis of the workers' firm being a secondary upstream supplier, the subject firm must produce a component part of the article that was the basis for the customers' certification. A company official was contacted to verify whether the subject firm supplied re-manufactured carburetors and throttle body injection units to the companies provided by the petitioner. The company official stated that TAP Holdings, LLC, Los Angeles, California did not directly sell to these companies and that these companies were not customers of the subject firm during the relevant time period. The Department conducted a further investigation and determined that none of the customers of the subject firm were certified eligible for TAA during the relevant time period. Conclusion After review of the application and investigative findings, I conclude that there has been no error or misinterpretation of the law or of the facts which would justify reconsideration of the Department of Labor's prior decision. Accordingly, the application is denied. Signed at Washington, DC this 5th day of February, 2007. Elliott S. Kushner, Certifying Officer, Division of Trade Adjustment Assistance. [FR Doc. E7-2285 Filed 2-9-07; 8:45 am] BILLING CODE 4510-FN-P DEPARTMENT OF LABOR Employment and Training Administration Workforce Investment Act; Native American Employment and Training Council AGENCY: Employment and Training Administration, Labor. ACTION: Notice of Meeting. SUMMARY: Pursuant to Section 10(a)(2) of the Federal Advisory Committee Act

(FACA)(Pub. L. 92-463), as amended, and Section 166(h)(4) of the Workforce Investment Act

(WIA)[29 U.S.C. 2911(h)(4)], notice is hereby given of the next meeting of the Native American Employment and Training Council (NAETC), as constituted under WIA. *Time And Date:* The meeting will begin at 9 a.m. Eastern Standard Time

(EST)on Wednesday, February 28, 2007, and continue until 5 p.m. that day. The period from 3 p.m. to 5 p.m. on February 28, 2007, will be reserved for participation and presentation by members of the public. The meeting will reconvene at 9 a.m. EST on Thursday, March 1, 2007, and adjourn at approximately 5 p.m. on that day. *Place:* All sessions will be held at the Wyndham Washington DC-Monticello West Room, 1400 M Street, NW., Washington, DC 20005. *Status:* The meeting will be open to the public. Persons who need special accommodations should contact the Designated Federal Official (DFO), Mr. Craig Lewis, at

(202)693-3384 by February 22, 2007. *Matters To Be Considered:* The formal agenda will focus on the following topics:

(1)Presentation on the Employment and Training Administration's Workforce Innovation in Regional Economic Development initiative and other relevant issues;

(2)NAETC election of officers;

(3)Review of Program Year 2005 performance results; and

(4)Work Group Reports and Recommendations. FOR FURTHER INFORMATION CONTACT: Mr. Craig Lewis, DFO, Indian and Native American Programs, Employment and Training Administration, U.S. Department of Labor, Room S-4206, 200 Constitution Avenue, NW., Washington, DC 20210. *Telephone:*

(202)693-3384 (VOICE) (this is not a toll-free number). Signed at Washington, DC this 6th day of February, 2007. Emily Stover DeRocco, Assistant Secretary, Employment and Training Administration. [FR Doc. E7-2282 Filed 2-9-07; 8:45 am] BILLING CODE 4510-30-P DEPARTMENT OF LABOR Occupational Safety And Health Administration [Docket No. NACOSH 2007-1] National Advisory Committee on Occupational Safety and Health (NACOSH); Request for Nominations to Serve on NACOSH AGENCY: Occupational Safety and Health Administration, Labor. ACTION: Request for nominations to serve on NACOSH. SUMMARY: The Assistant Secretary of Labor for Occupational Safety and Health

(OSHA)requests nominations for membership on NACOSH. DATES: Nominations for NACOSH must be submitted (postmarked, sent or received) by March 14, 2007. ADDRESSES: You may submit nominations for NACOSH, identified by OSHA Docket No. NACOSH 2007-1, by any of the following methods: *Electronically:* You may submit nominations, including attachments, electronically at *http://www.regulations.gov* , which is the Federal eRulemaking Portal. Follow the instructions on-line for submitting nominations. *Facsimile:* If your nomination, including attachments, is not longer than 10 pages, you may fax it to the OSHA Docket Office at

(202)693-1648. *Mail, express delivery, hand delivery, messenger or courier service:* Submit three copies of your nominations to the OSHA Docket Office, Room N-2625, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210; telephone

(202)693-2350 (OSHA's TTY number is

(877)889-5627). Deliveries (hand, express mail, messenger and courier service) are accepted during the Department of Labor's and Docket Office's normal business hours, 8:15 a.m.-4:45 p.m., e.t. *Instructions:* All nominations for NACOSH must include the Agency name and docket number for this **Federal Register** notice (Docket No. NACOSH 2007-1). All submissions in response to this **Federal Register** notice, including personal information provided, will be posted without change at *http://www.regulations.gov* . Because of security-related procedures, submitting nominations by regular mail may result in a significant delay in their receipt. Please contact the OSHA Docket Office, at the address above, for information about security procedures for submitting nominations by hand delivery, express delivery, and messenger or courier service. For additional information on submitting nominations, see the SUPPLEMENTARY INFORMATION section below. *Docket:* To read or download submissions, go to *http://www.regulations.gov* . All documents in the docket are listed in the *http://www.regulations.gov* index. Although listed in the index, some information (e.g., copyrighted material) is not publicly available to read or download through *http://www.regulations.gov* . All submissions, including copyrighted material, are available for inspection and copying at the OSHA Docket Office at the address above. FOR FURTHER INFORMATION CONTACT: Deborah Crawford, OSHA, Directorate of Evaluation and Analysis, Room N-3641, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210; telephone

(202)693-1932; fax

(202)693-1641; e-mail address *crawford.deborah@dol.gov* . SUPPLEMENTARY INFORMATION: The Assistant Secretary of Labor for Occupational Safety and Health invites interested parties to submit nominations for membership on NACOSH. The Committee is authorized by section 7(a) of the Occupational Safety and Health Act of 1970 (OSH Act) (29 U.S.C. 656) to advise the Secretary of Labor and the Secretary of Health and Human Services on matters relating to the administration of the OSH Act. NACOSH is a continuing advisory body and operates in compliance with provisions in the OSH Act and the Federal Advisory Committee Act (5 U.S.C. App. 2), and regulations issued pursuant to those laws (29 CFR 1912a, 41 CFR part 101-6 and 102-3). NACOSH is comprised of 12 members, all of whom the Secretary of Labor appoints, and nominations will be accepted for seven vacancies (29 CFR 1912a.2). The composition of the committee and categories of new members to be appointed are as follows: • Four public representatives. Two will be appointed; • Two management representatives. One will be appointed; • Two labor representatives. Two will be appointed; • Two representatives representing occupational safety professions. One will be appointed; and, • Two representing occupational health professions. One health representative will be appointed. Pursuant to 29 CFR 1912a.2, the Secretary of Health and Human Services

(HHS)will designate for appointment by the Secretary of Labor one of the public representatives and the representative from the occupational health professions. Therefore, OSHA will provide to HHS all nominations, including supporting materials, for those membership categories. NACOSH members serve for staggered of two year terms, unless the member becomes unable to serve, resigns, ceases to be qualified to serve because he or she no longer meets the relevant representational requirements, or is removed by the Secretary of Labor. If a vacancy occurs before a term expires, the Secretary may appoint for the remainder of the unexpired term a new member who represents the same interest as the predecessor. The committee meets at least two times a year (§ 1912a.4). Any interested person or organization may nominate one or more qualified persons for membership. Nominations must include the nominee's name, occupation or current position, and contact information. The nomination also must identify the category that the candidate is qualified to represent, and include a resume of the nominee's background, experience, and qualifications. In addition, the nomination must state that the nominee is aware of the nomination and is willing to serve on NACOSH for a two-year term. NACOSH members will be selected upon the basis of their experience and competence in the field of occupational safety and health (§ 1912a.2). The information received through this nomination process, in addition to other relevant sources of information, will assist the Secretary of Labor in appointing members to serve on NACOSH. In selecting NACOSH members, the Secretary of Labor will consider individuals nominated in response to this **Federal Register** notice, as well as other qualified individuals. OSHA will publish the new NACOSH membership list in the **Federal Register** . Public Participation—Submission of Nominations and Access to Docket You may submit nominations

(1)electronically at *http://www.regulations.gov,* which is the Federal eRulemaking Portal;

(2)by facsimile (FAX); or

(3)by hard copy. All comments, attachments and other material must identify the Agency name and the OSHA docket number for this **Federal Register** notice (OSHA Docket No. NACOSH 2007-1). You may supplement electronic nominations by uploading document files electronically. If, instead, you wish to mail additional materials in reference to an electronic or fax submission, you must submit three copies to the OSHA Docket Office (see ADDRESSES section). The additional materials must clearly identify your electronic nomination by name, date, and docket number so OSHA can attach them to your nomination. Because of security-related procedures, the use of regular mail may cause a significant delay in the receipt of nominations. For information about security procedures concerning the delivery of materials by hand, express delivery, messenger or courier service, please contact the OSHA Docket Office at

(202)693-2350 (TTY

(877)889-5627). Submissions are posted without change at *http://www.regulations.gov.* Therefore, OSHA cautions interested parties about submitting personal information such as social security numbers and birth dates. Although all submissions are listed in the *http://www.regulations.gov* index, some information (e.g., copyrighted material) is not publicly available to read or download through *http://www.regulations.gov.* All submissions, including copyrighted material, are available for inspection and copying at the OSHA Docket Office. Information on using the *http://www.regulations.gov* Web site to submit comments and access the docket is available at the Web site's User Tips link. Contact the OSHA Docket Office for information about materials not available through the Web site and for assistance in using the internet to locate docket submissions. Electronic copies of this **Federal Register** document are available at *http://www.regulations.gov.* This document, as well as news releases and other relevant information, also are available at OSHA's Web page at *http://www.osha.gov.* Authority and Signature Edwin G. Foulke, Jr., Assistant Secretary of Labor for Occupational Safety and Health, directed the preparation of this notice under the authority granted by section 7 of the Occupational Safety and Health Act of 1970 (29 U.S.C. 656), 29 CFR 1912a, and Secretary of Labor's Order No. 5-2002 (67 FR 65008). Signed at Washington, DC this 5th day of February, 2007. Edwin G. Foulke, Jr., Assistant Secretary of Labor. [FR Doc. E7-2239 Filed 2-9-07; 8:45 am] BILLING CODE 4510-26-P NATIONAL CREDIT UNION ADMINISTRATION Agency Information Collection Activities: Submission To OMB for Review; Comment Request AGENCY: National Credit Union Administration (NCUA). ACTION: Request for comment. SUMMARY: The NCUA is resubmitting the following information collection to the Office of Management and Budget

(OMB)for review and clearance under the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. Chapter 35). This information collection is published to obtain comments from the public. DATES: Comments will be accepted until April 13, 2007. ADDRESSES: Interested parties are invited to submit written comments to NCUA Clearance Officer listed below: Clearance Officer: Mr. Neil McNamara, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428, Fax No. 703-837-2861, *E-mail:* _ *ociomail@ncua.gov* . FOR FURTHER INFORMATION CONTACT: Requests for additional information or a copy of the information collection request, should be directed to Tracy Sumpter at the National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428, or at

(703)518-6444. SUPPLEMENTARY INFORMATION: Proposal for the following collection of information: *OMB Number:* 3133-0032. *Form Number:* N/A. *Type of Review:* Reinstatement, without change, of a previously approved collection. *Title:* Records Preservation under 12 CFR Part 749. *Description:* Part 749 of NCUA Regulations directs each credit union to store copies of their members' share and loan balances away from the credit union's premises and maintain a log about the stored information. *Respondents:* All credit unions. *Estimated No. of Respondents/Recordkeepers:* 9,128. *Estimated Burden Hours per Response:* 2 hours. *Frequency of Response:* Quarterly. *Estimated Total Annual Burden Hours:* 18,256. *Estimated Total Annual Cost:* $912,800. By the National Credit Union Administration Board on January 22, 2007. Mary Rupp, Secretary of the Board. [FR Doc. E7-2235 Filed 2-9-07; 8:45 am] BILLING CODE 7535-01-P NATIONAL CREDIT UNION ADMINISTRATION Agency Information Collection Activities: Submission to OMB for Review; Comment Request AGENCY: National Credit Union Administration (NCUA). ACTION: Request for comment. SUMMARY: The NCUA intends to submit the following information collection to the Office of Management and Budget

(OMB)for review and clearance under the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. Chapter 35). This information collection is published to obtain comments from the public. DATES: Comments will be accepted until April 13, 2007. ADDRESSES: Interested parties are invited to submit written comments to NCUA Clearance Officer listed below: Clearance Officer: Mr. Neil McNamara, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428, Fax No. 703-837-2861, E-mail: *OCIOmail@ncua.gov.* FOR FURTHER INFORMATION CONTACT: Requests for additional information or a copy of the information collection request, should be directed to Tracy Sumpter at the National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428, or at

(703)518-6444. SUPPLEMENTARY INFORMATION: Proposal for the following collection of information: *OMB Number:* 3133-0141. *Form Number:* N/A. *Type of Review:* Reinstatement, without change, of a previously approved collection. *Title:* 12 CFR 701.22 Organization and Operation of Federal Credit Unions—Loan Participations. *Description:* NCUA has authorized federal credit unions to engage in loan participations, provided they establish written policies and enter into a written loan participation agreement. NCUA believes written policies are necessary to ensure a plan is fully considered before being adopted by the Board. *Respondents:* All Federal Credit Unions. *Estimated No. of Respondents/Recordkeepers:* 1,000. *Estimated Burden Hours per Response:* 4 hours. *Frequency of Response:* On occasion. *Estimated Total Annual Burden Hours:* 4,000. *Estimated Total Annual Cost:* $100,000. By the National Credit Union Administration Board on January 22, 2007. Mary Rupp, Secretary of the Board. [FR Doc. E7-2237 Filed 2-9-07; 8:45 am] BILLING CODE 7535-01-P NUCLEAR REGULATORY COMMISSION Agency Information Collection Activities: Proposed Collection; Comment Request AGENCY: U.S. Nuclear Regulatory Commission (NRC). ACTION: Notice of pending NRC action to submit an information collection request to OMB and solicitation of public comment. SUMMARY: The NRC is preparing a submittal to OMB for review of continued approval of information collections under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). Information pertaining to the requirement to be submitted: 1. *The title of the information collection:* 10 CFR Part 95—Facility Security Clearance and Safeguarding of National Security Information and Restricted Data. 2. *Current OMB approval number:* OMB No. 3150-0047. 3. *How often the collection is required:* On occasion. 4. *Who is required or asked to report:* NRC-regulated facilities and other organizations requiring access to NRC-classified information. 5. *The number of annual respondents:* 26 (16 plus 10 recordkeepers). 6. *The number of hours needed annually to complete the requirement or request:* 954 hours (805 hours reporting [3 hrs per response] and 149 hours recordkeeping [14 hrs per recordkeeper]). 7. *Abstract:* NRC-regulated facilities and other organizations are required to provide information and maintain records to ensure that an adequate level of protection is provided to NRC-classified information and material. Submit, by April 13, 2007, comments that address the following questions: 1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility? 2. Is the burden estimate accurate? 3. Is there a way to enhance the quality, utility, and clarity of the information to be collected? 4. How can the burden of the information collection be minimized, including the use of automated collection techniques or other forms of information technology? A copy of the draft supporting statement may be viewed free of charge at the NRC Public Document Room, One White Flint North, 11555 Rockville Pike, Room O-1 F21, Rockville, MD 20852. OMB clearance requests are available at the NRC worldwide Web site: *http://www.nrc.gov/public-involve/doc-comment/omb/index.html.* The document will be available on the NRC home page site for 60 days after the signature date of this notice. Comments and questions about the information collection requirements may be directed to the NRC Clearance Officer, Margaret A. Janney (T-5 F52), U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, by telephone at 301-415-7245, or by Internet electronic mail to *INFOCOLLECTS@NRC.GOV.* Dated at Rockville, Maryland, this 5th day of February 2007. For the Nuclear Regulatory Commission. Margaret A. Janney, NRC Clearance Officer, Office of Information Services. [FR Doc. E7-2324 Filed 2-9-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [Docket No. 50-397] Energy Northwest; Notice of Consideration of Issuance of Amendment to Facility Operating License, Proposed No Significant Hazards Consideration Determination, and Opportunity for a Hearing The U.S. Nuclear Regulatory Commission (the Commission) is considering issuance of an amendment to Facility Operating License No. NPF-21, issued to Energy Northwest (the licensee), for operation of the Columbia Generating Station located in Benton County, Washington. The proposed amendment would revise Technical Specification

(TS)3.6.1.7, “Suppression Chamber-to-Drywell Vacuum Breakers,” to allow a one-time extension to the current closure verification surveillance requirement

(SR)for one of two redundant disks in one of nine vacuum breakers until reliable position indication can be restored in the main control room during the next refueling outage (R-18). Verification of closure of each vacuum breaker disk is currently required every 14 days by SR 3.6.1.7.1. The licensee requested that the proposed change be considered on an exigent basis. The licensee stated that during the January 6, 2007, functional test of vacuum breaker CVB-V-1JK, one of the redundant disks in the vacuum breaker assembly did not meet the procedurally defined acceptance criteria for open or close due to an issue with position indication limit switches. This problem has resulted in unreliable position indication for closure of the rear disk of the vacuum breaker and requires an alternate method of closure verification be employed ( *i.e.* , a differential pressure test). Consistent with SR 3.6.1.7.1, this test must be performed every 14 days. However, performance of the alternate test creates an unnecessary increase in plant risk relative to other compensatory options. The proposed one-time change to TS 3.6.1.7 would revise SR 3.6.1.7.1 by adding a note to provide an extension to the SR for the rear disk of vacuum breaker CVB-V-1JK. This extension would remain in effect until the end of R-18, currently scheduled to begin on May 12, 2007. On January 6, 2007, during a functional test of vacuum breaker CVB-V-1JK, the rear disk of the vacuum breaker did not meet the procedurally defined acceptance criteria for open or close due to an issue with the position indication limit switches. When CVB-V-1JK was cycled from the control room, the close position indication did not extinguish and prevented the open position indication from illuminating. The separate full open indication did illuminate, indicating that the rear disk opened as expected; however, the closure of the disk could not be confirmed using normal position indication. With unreliable position indication in the main control room for the rear disk of vacuum breaker CVB-1JK, the alternate method of closure verification using the differential pressure test is required. This test, as described in the TS Bases, involves establishing a differential pressure between the drywell and suppression chamber equal to, or in excess of, 0.5 pounds per square inch differential

(psid)to verify that the disk being tested can maintain that differential for 60 minutes. Current test procedures specify that a differential pressure of 0.7 to 0.75 psid be established between the drywell and suppression chamber. This value provides margin to accommodate minor internal drywell temperature changes during the testing. Maintaining a differential pressure between the drywell and suppression chamber is a positive indication that the vacuum breaker disk being tested is closed. This test was performed on the rear disk of vacuum breaker CVB-V-1JK on January 8, 2007, and again on January 22, 2007, and confirmed that the disk was seated. The degraded limit switches and associated circuitry are located in the inerted wetwell and cannot be accessed to restore normal position indication in the control room for the rear disk of vacuum breaker CVB-V-1JK while at power. Therefore, continued compliance with SR 3.6.1.7.1 would require that this pressure test be performed every 14 days. The licensee stated that when performing the vacuum breaker closure differential pressure test, drywell pressure is increased from near atmospheric conditions to approximately 45 percent of the Drywell Pressure—High scram setpoint of 1.68 pounds per square inch gauge. Frequent differential pressure testing places the plant in a condition with degraded margin for a reactor scram. This increases the risk of an inadvertent reactor scram from a minor drywell pressure transient which may have been managed by the operator if it occurred at a normal drywell pressure and can unduly challenge plant safety systems and personnel. Furthermore, when performing the differential pressure test to verify continued closure of the rear disk of vacuum breaker CVB-V-1JK, the front disk is required to be open for at least 60 minutes while the test is being performed which degrades the capability of the vacuum breaker assembly to prevent bypass leakage when required. As previously discussed, TS 3.6.1.7 recognizes this increase in plant risk by drawing a distinction between an actual communication path and a potential communication path in the derivation of entry conditions and required actions. The licensee concluded that a more appropriate method to maintain public health and safety is to ensure that both disks of vacuum breaker CVB-V-1JK continue to maintain their current closed position without a change of state. Operating in this configuration, both the front and rear disks of vacuum breaker CVB-V-1JK would conservatively not be credited to perform the open safety function and would be declared inoperable for opening. Both disks are currently closed and have been verified as such using the normal position indication in the control room for the front disk and by the differential pressure test for the rear disk. This configuration is currently allowed by TS 3.6.1.7, since only seven of nine vacuum breakers are required to be operable for opening while in Modes 1, 2, and 3. In addition, with vacuum breaker CVB-V-1JK declared inoperable for the open function, SR 3.6.1.7.2 would not be required to be performed and the breaker disks would not need to be cycled. Continued operation in this manner until the end of R-18 would ensure that plant risk is minimized but also requires an extension from the current 14-day interval of SR 3.6.1.7.1. The proposed change is necessary because continued performance of SR 3.6.1.7.1 for the rear disk of CVB-V-1JK results in putting the plant in a condition that unduly increases the risk of an inadvertent reactor scram challenging both plant systems and personnel. Failure to perform the differential pressure test required by SR 3.6.1.7.1 would result in a failed verification of the current closed state of these vacuum breakers. TS 3.6.1.7 would then require placing the reactor in Mode 3 within the next 84 hours and Mode 4 in the following 24 hours and would also challenge plant system and personnel. The licensee states that it will continue to verify that the front disk of CVB-V-1JK and both disks of the other 8 vacuum breakers are closed every 14 days as required by SR 3.6.1.7.1. If reasonable evidence is discovered to conclude that the rear disk of vacuum breaker CVB-V-1JK may no longer be in a closed position, the licensee states that it will take compensatory measures to verify that this disk is closed within 72 hours or declare the disk not closed and enter the appropriate action statement. In the proposed note, evidence that the rear disk may no longer be in a closed position is defined as evidence that the front disk has opened or that the rear disk has experienced a differential pressure in the direction that could cause the disk to open. Before issuance of the proposed license amendment, the Commission will have made findings required by the Atomic Energy Act of 1954, as amended (the Act) and the Commission's regulations. Pursuant to 10 CFR 50.91(a)(6) for amendments to be granted under exigent circumstances, the NRC staff must determine that the amendment request involves no significant hazards consideration. Under the Commission's regulations in 10 CFR 50.92, this means that operation of the facility in accordance with the proposed amendment would not

(1)Involve a significant increase in the probability or consequences of an accident previously evaluated; or

(2)create the possibility of a new or different kind of accident from any accident previously evaluated; or

(3)involve a significant reduction in a margin of safety. As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: 1. Does the proposed amendment involve a significant increase in the probability or consequences of an accident previously evaluated? *Response:* No. Proper functioning of the suppression chamber-to-drywell vacuum breakers is required for accident mitigation. Failure of the vacuum breakers is not assumed as an accident initiator for any accident previously evaluated. Therefore, any potential failure of a vacuum breaker to perform when necessary will not affect the probability of an accident previously evaluated. During a LOCA [loss-of-coolant accident], the vacuum breakers are assumed to initially be closed to limit drywell-to-suppression chamber bypass leakage and must be capable of re-closing following a suppression pool swell event. The vacuum breakers open to prevent an excessive vacuum in the drywell. The proposed change will not affect the capability of the required vacuum breakers to perform their open and close safety functions since the change only affects position verification and high confidence is assured that the disk remains closed. Therefore, the proposed changes do not involve a significant increase in the probability or consequences of an accident previously evaluated. 2. Does the proposed amendment create the possibility of a new or different kind of accident from any accident previously evaluated? *Response:* No. The suppression chamber-to-drywell vacuum breakers are used to mitigate the potential consequences of an accident. The proposed change does not affect the capability of required vacuum breakers to perform their open and closed safety functions. Thus, the initial conditions assumed in the accident analysis are not affected. The proposed amendment does not involve a change to plant design and does not involve any new modes of operation or testing methods. Accordingly, the required vacuum breakers will continue to perform their accident mitigation safety functions as previously evaluated. Therefore, the proposed changes do not create the possibility of a new or different kind of accident from any accident previously evaluated. 3. Does the proposed amendment involve a significant reduction in a margin of safety? *Response:* No. The extension of the closure verification surveillance interval for one of the two disks in a vacuum breaker for approximately 4 months is not risk significant as all required safety functions will continue to be performed. The vacuum breakers are not modified by the proposed amendment. The accident analysis assumptions for the closed safety functions of the vacuum breakers are satisfied when at least one of the disks in each of the nine vacuum breaker lines are fully closed and capable of re-closing following a suppression pool swell. The additional disk in each line satisfies the single failure criterion. The open safety function of the vacuum breakers is satisfied when 6 of the 9 vacuum breaker assemblies open during a DBA [design basis accident]. The other vacuum breakers satisfy the single failure criterion and provide additional defense-in-depth. Since all of the vacuum breakers are considered to perform their close safety function and 8 of 9 would be available to perform their open safety function, the proposed change will not involve a significant reduction in a margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. The Commission is seeking public comments on this proposed determination. Any comments received within 14 days after the date of publication of this notice will be considered in making any final determination. Normally, the Commission will not issue the amendment until the expiration of the 14-day notice period. However, should circumstances change during the notice period, such that failure to act in a timely way would result, for example, in derating or shutdown of the facility, the Commission may issue the license amendment before the expiration of the 14-day notice period, provided that its final determination is that the amendment involves no significant hazards consideration. The final determination will consider all public and State comments received. Should the Commission take this action, it will publish in the **Federal Register** a notice of issuance. The Commission expects that the need to take this action will occur very infrequently. Written comments may be submitted by mail to the Chief, Rulemaking, Directives and Editing Branch, Division of Administrative Services, Office of Administration, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and should cite the publication date and page number of this **Federal Register** notice. Written comments may also be delivered to Room 6D59, Two White Flint North, 11545 Rockville Pike, Rockville, Maryland, from 7:30 a.m. to 4:15 p.m. Federal workdays. Documents may be examined, and/or copied for a fee, at the NRC's Public Document Room, located at One White Flint North, Public File Area O1 F21, 11555 Rockville Pike (first floor), Rockville, Maryland. The filing of requests for hearing and petitions for leave to intervene is discussed below. Within 60 days after the date of publication of this notice, the licensee may file a request for a hearing with respect to issuance of the amendment to the subject facility operating license and any person whose interest may be affected by this proceeding and who wishes to participate as a party in the proceeding must file a written request for a hearing and a petition for leave to intervene. Requests for a hearing and a petition for leave to intervene shall be filed in accordance with the Commission's “Rules of Practice for Domestic Licensing Proceedings and Issuance of Orders” in 10 CFR Part 2. Interested persons should consult a current copy of 10 CFR 2.309, which is available at the Commission's PDR, located at One White Flint North, Public File Area O1 F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible from the Agencywide Documents Access and Management System's (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site, *http://www.nrc.gov/reading-rm/doc-collections/cfr/* . If a request for a hearing or petition for leave to intervene is filed by the above date, the Commission or a presiding officer designated by the Commission or by the Chief Administrative Judge of the Atomic Safety and Licensing Board Panel, will rule on the request and/or petition; and the Secretary or the Chief Administrative Judge of the Atomic Safety and Licensing Board will issue a notice of a hearing or an appropriate order. As required by 10 CFR 2.309, a petition for leave to intervene shall set forth with particularity the interest of the petitioner in the proceeding, and how that interest may be affected by the results of the proceeding. The petition should specifically explain the reasons why intervention should be permitted with particular reference to the following general requirements:

(1)The name, address and telephone number of the requestor or petitioner;

(2)the nature of the requestor's/petitioner's right under the Act to be made a party to the proceeding;

(3)the nature and extent of the requestor's/petitioner's property, financial, or other interest in the proceeding; and

(4)the possible effect of any decision or order which may be entered in the proceeding on the requestor's/petitioner's interest. The petition must also identify the specific contentions which the petitioner/requestor seeks to have litigated at the proceeding. Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted. In addition, the petitioner/requestor shall provide a brief explanation of the bases for the contention and a concise statement of the alleged facts or expert opinion which support the contention and on which the petitioner intends to rely in proving the contention at the hearing. The petitioner/requestor must also provide references to those specific sources and documents of which the petitioner/requestor is aware and on which the petitioner/requestor intends to rely to establish those facts or expert opinion. The petitioner/requestor must provide sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. Contentions shall be limited to matters within the scope of the amendment under consideration. The contention must be one which, if proven, would entitle the petitioner/requestor to relief. A petitioner/requestor who fails to satisfy these requirements with respect to at least one contention will not be permitted to participate as a party. Those permitted to intervene become parties to the proceeding, subject to any limitations in the order granting leave to intervene, and have the opportunity to participate fully in the conduct of the hearing. If a hearing is requested, the Commission will make a final determination on the issue of no significant hazards consideration. The final determination will serve to decide when the hearing is held. If the final determination is that the amendment request involves no significant hazards consideration, the Commission may issue the amendment and make it immediately effective, notwithstanding the request for a hearing. Any hearing held would take place after issuance of the amendment. If the final determination is that the amendment request involves a significant hazards consideration, any hearing held would take place before the issuance of any amendment. Nontimely requests and/or petitions and contentions will not be entertained absent a determination by the Commission or the presiding officer of the Atomic Safety and Licensing Board that the petition, request and/or the contentions should be granted based on a balancing of the factors specified in 10 CFR 2.309(c)(1)(i)-(viii). A request for a hearing or a petition for leave to intervene must be filed by:

(1)First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff;

(2)courier, express mail, and expedited delivery services: Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, Maryland, 20852, Attention: Rulemaking and Adjudications Staff;

(3)E-mail addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, *HEARINGDOCKET@NRC.GOV* ; or

(4)facsimile transmission addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC, Attention: Rulemakings and Adjudications Staff at

(301)415-1101, verification number is

(301)415-1966. A copy of the request for hearing and petition for leave to intervene should also be sent to the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and it is requested that copies be transmitted either by means of facsimile transmission to 301-415-3725 or by e-mail to *OGCMailCenter@nrc.gov* . A copy of the request for hearing and petition for leave to intervene should also be sent to William A. Horin, Esq., Winston & Strawn, 1700 K Street, NW., Washington, DC 20006-3817, attorney for the licensee. For further details with respect to this action, see the application for amendment dated February 2, 2007, which is available for public inspection at the Commission's Public Document Room (PDR), located at One White Flint North, Public File Area O1 F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible electronically from the Agencywide Documents Access and Management System's (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site *http://www.nrc.gov/reading-rm.html* . Persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS should contact the NRC PDR Reference staff by telephone at 1-800-397-4209, or 301-415-4737, or by e-mail to *pdr@nrc.gov* . Dated at Rockville, Maryland, this 6th day of February 2007. For the Nuclear Regulatory Commission. Carl F. Lyon, Project Manager, Plant Licensing Branch IV, Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation. [FR Doc. E7-2374 Filed 2-9-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [Docket No. 50-272] Pilgrim Nuclear Power Station, Entergy Nuclear Operations, Inc.; Notice of Consideration of Issuance of Amendment to Facility Operating License, Proposed No Significant Hazards Consideration Determination, and Opportunity for a Hearing The U.S. Nuclear Regulatory Commission (NRC or the Commission) is considering issuance of an amendment to Facility Operating License No. DPR-35 issued to Entergy Nuclear Operations, Inc. (the licensee) for operation of the Pilgrim Nuclear Power Station (Pilgrim), located in Plymouth County, Massachusetts. The amendment request dated January 15, 2007, supercedes the previously submitted license amendment request dated April 12, 2006, proposing new Pressure-Temperature

(PT)curves and to extend the applicability of current PT limits expressed in Technical Specification Figures 3.6.1, 3.6.2, and 3.6.3 through the end of operating cycle 18. Before issuance of the proposed license amendment, the Commission will have made findings required by the Atomic Energy Act of 1954, as amended (the Act), and the Commission's regulations. The Commission has made a proposed determination that the amendment request involves no significant hazards consideration. Under the Commission's regulations in Title 10 of the Code of Federal Regulations (10 CFR), Section 50.92, this means that operation of the facility in accordance with the proposed amendment would not

(1)Involve a significant increase in the probability or consequences of an accident previously evaluated;

(2)create the possibility of a new or different kind of accident from any accident previously evaluated; or

(LA)does not involve a significant increase in the probability or consequences of an accident previously evaluated. There are no physical changes to the plant being introduced by the proposed changes to a restriction associated with the pressure-temperature curves. The proposed change does not modify the reactor coolant pressure boundary, (i.e., there are no changes in operating pressure, materials, or seismic loading). The proposed change does not adversely affect the integrity of the reactor coolant pressure boundary such that its function in the control of radiological consequences is affected. The current pressure-temperature curves were generated in accordance with the fracture toughness requirements of 10 CFR Part 50, Appendix G, and American Society of Mechanical Engineers

(ASME)Boiler and Pressure Vessel (B&PV) Code, Section Xl, Appendix G and NRC Regulatory Guide 1.99, Revision 2, “Radiation Embrittlement of Reactor Vessel Materials.” The current pressure-temperature curves were established in compliance with the methodology used to calculate and predict effects of radiation on embrittlement of reactor vessel beltline materials. The use of the proposed pressure-temperature curves through operating cycle 18 is acceptable because sufficient margin exists between the actual Effective Full Power Years (EFPYs) and the Effective Full Power Years used to establish the 48 EFPY curve. This proposed license amendment provides compliance with the intent of 10 CFR Part 50, Appendix G, and provides margins of safety that assure reactor vessel integrity. Therefore, the proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated. 2. Does the [proposed] change create the possibility of a new or different kind of accident from any accident previously evaluated? Response: No. The proposed license amendment does not create the possibility of new or different kind of accident from any accident previously evaluated. The pressure-temperature curves were generated in accordance with the fracture toughness requirements of 10 CFR Part 50, Appendix G, and ASME B&PV Code, Section Xl, Appendix G. Compliance with the proposed pressure-temperature curves will ensure the avoidance of conditions in which brittle fracture of primary coolant pressure boundary materials is possible because such compliance with the current pressure-temperature curves provides sufficient protection against a nonductile-type fracture of the reactor pressure vessel. No new modes of operation are introduced by the proposed change. The proposed change will not create any failure mode not bounded by previously evaluated accidents. Further, the proposed change does not affect any activities or equipment and is not assumed in any safety analysis to initiate any accident sequence. Therefore, the proposed change does not create the possibility of a new or different kind of accident from any previously evaluated. 3. Does the proposed change involve a significant reduction in a margin of safety? Response: No. The current curves are based on established NRC and ASME methodologies in force when LA 197 was approved. The proposed license amendment requests the use of the proposed curves for two additional operating cycles. This is acceptable because sufficient margin exists between actual EFPYs and the EFPYs used in the development of the existing curves to yield a conservatism factor slightly in excess of 1.8. Operation within the current limits ensures that the reactor vessel materials will continue to behave in a non-brittle manner, thereby preserving the original safety design bases. No plant safety limits, set points, or design parameters are adversely affected by the proposed changes. Therefore, the proposed change does not involve a significant reduction in a margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. The Commission is seeking public comments on this proposed determination. Any comments received within 30 days after the date of publication of this notice will be considered in making any final determination. Normally, the Commission will not issue the amendment until the expiration of 60 days after the date of publication of this notice. The Commission may issue the license amendment before expiration of the 60-day period provided that its final determination is that the amendment involves no significant hazards consideration. In addition, the Commission may issue the amendment prior to the expiration of the 30-day comment period should circumstances change during the 30-day comment period such that failure to act in a timely way would result, for example, in derating or shutdown of the facility. Should the Commission take action prior to the expiration of either the comment period or the notice period, it will publish in the **Federal Register** a notice of issuance. Should the Commission make a final No Significant Hazards Consideration Determination, any hearing will take place after issuance. The Commission expects that the need to take this action will occur very infrequently. Written comments may be submitted by mail to the Chief, Rulemaking, Directives and Editing Branch, Division of Administrative Services, Office of Administration, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and should cite the publication date and page number of this **Federal Register** notice. Written comments may also be delivered to Room 6D59, Two White Flint North, 11545 Rockville Pike, Rockville, Maryland, from 7:30 a.m. to 4:15 p.m. Federal workdays. Documents may be examined, and/or copied for a fee, at the NRC's Public Document Room (PDR), located at One White Flint North, Public File Area O1F21, 11555 Rockville Pike (first floor), Rockville, Maryland. The filing of requests for hearing and petitions for leave to intervene is discussed below. Within 60 days after the date of publication of this notice, the licensee may file a request for a hearing with respect to issuance of the amendment to the subject facility operating license and any person whose interest may be affected by this proceeding and who wishes to participate as a party in the proceeding must file a written request for a hearing and a petition for leave to intervene. Requests for a hearing and a petition for leave to intervene shall be filed in accordance with the Commission's “Rules of Practice for Domestic Licensing Proceedings” in 10 CFR Part 2. Interested persons should consult a current copy of 10 CFR 2.309, which is available at the Commission's PDR, located at One White Flint North, Public File Area O1F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible from the Agencywide Documents Access and Management System's (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site, *http://www.nrc.gov/reading-rm/doc-collections/cfr/.* If a request for a hearing or petition for leave to intervene is filed by the above date, the Commission or a presiding officer designated by the Commission or by the Chief Administrative Judge of the Atomic Safety and Licensing Board Panel, will rule on the request and/or petition; and the Secretary or the Chief Administrative Judge of the Atomic Safety and Licensing Board will issue a notice of a hearing or an appropriate order. As required by 10 CFR 2.309, a petition for leave to intervene shall set forth with particularity the interest of the petitioner in the proceeding, and how that interest may be affected by the results of the proceeding. The petition should specifically explain the reasons why intervention should be permitted with particular reference to the following general requirements:

(1)The name, address and telephone number of the requestor or petitioner;

(2)the nature of the requestor's/petitioner's right under the Act to be made a party to the proceeding;

(3)the nature and extent of the requestor's/petitioner's property, financial, or other interest in the proceeding; and

(4)the possible effect of any decision or order which may be entered in the proceeding on the requestors/petitioner's interest. The petition must also identify the specific contentions which the petitioner/requestor seeks to have litigated at the proceeding. Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted. In addition, the petitioner/requestor shall provide a brief explanation of the bases for the contention and a concise statement of the alleged facts or expert opinion which support the contention and on which the petitioner intends to rely in proving the contention at the hearing. The petitioner/requestor must also provide references to those specific sources and documents of which the petitioner is aware and on which the petitioner intends to rely to establish those facts or expert opinion. The petition must include sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. Contentions shall be limited to matters within the scope of the amendment under consideration. The contention must be one which, if proven, would entitle the petitioner to relief. A petitioner/requestor who fails to satisfy these requirements with respect to at least one contention will not be permitted to participate as a party. Those permitted to intervene become parties to the proceeding, subject to any limitations in the order granting leave to intervene, and have the opportunity to participate fully in the conduct of the hearing. If a hearing is requested, the Commission will make a final determination on the issue of no significant hazards consideration. The final determination will serve to decide when the hearing is held. If the final determination is that the amendment request involves no significant hazards consideration, the Commission may issue the amendment and make it immediately effective, notwithstanding the request for a hearing. Any hearing held would take place after issuance of the amendment. If the final determination is that the amendment request involves a significant hazards consideration, any hearing held would take place before the issuance of any amendment. Nontimely requests and/or petitions and contentions will not be entertained absent a determination by the Commission or the presiding officer of the Atomic Safety and Licensing Board that the petition, request and/or the contentions should be granted based on a balancing of the factors specified in 10 CFR 2.309(c)(1)(i)-(viii). A request for a hearing or a petition for leave to intervene must be filed by:

(1)First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff;

(3)E-mail addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, *HEARINGDOCKET@NRC.GOV* ; or

(4)facsimile transmission addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC, Attention: Rulemakings and Adjudications Staff at

(301)415-1101, verification number is

(301)415-1966. A copy of the request for hearing and petition for leave to intervene should also be sent to the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and it is requested that copies be transmitted either by means of facsimile transmission to 301-415-3725 or by e-mail to *OGCMailCenter@nrc.gov.* A copy of the request for hearing and petition for leave to intervene should also be sent to Travis C. McCullough, Assistant General Counsel, Entergy Nuclear Operations, Inc., 400 Hamilton Avenue, White Plains, NY 10601, attorney for the licensee. For further details with respect to this action, see the application for amendment dated January 15, 2007, which is available for public inspection at the Commission's PDR, located at One White Flint North, File Public Area O1 F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible from the ADAMS Public Electronic Reading Room on the Internet at the NRC Web site, *http://www.nrc.gov/reading-rm/adams.html.* Persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS, should contact the NRC PDR Reference staff by telephone at 1-800-397-4209, 301-415-4737, or by e-mail to *pdr@nrc.gov.* Dated at Rockville, Maryland, this 5th day of February 2007. For the Nuclear Regulatory Commission. James Kim, Project Manager, Plant Licensing Branch I-1, Division of Operating Reactor Licensing, Office of Nuclear Reactor Regulation. [FR Doc. E7-2321 Filed 2-9-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [Docket Nos. 50-334 and 50-412] FirstEnergy Nuclear Operating Company, Firstenergy Nuclear Generation Corp.; Ohio Edison Company; The Toledo Edison Company; Beaver Valley Power Station, Unit Nos. 1 and 2; Environmental Assessment and Finding of No Significant Impact The U.S. Nuclear Regulatory Commission

(NRC)is considering issuance of an amendment to Facility Operating License Nos. DPR-66 and NPF-73, issued to the FirstEnergy Nuclear Operating Company (the licensee) for operation of the Beaver Valley Power Station, Unit Nos. 1 and 2 (BVPS-1 and 2), located in Beaver County, Pennsylvania. Pursuant to Title 10 of the Code of Federal Regulations (10 CFR) Sections 51.21 and 51.32, the NRC is issuing this environmental assessment and finding of no significant impact. Environmental Assessment Identification of the Proposed Action The proposed action would be a conversion from the current Technical Specifications

(CTSs)to the Improved Technical Specifications

(ITSs)format based on NUREG-1431, “Standard Technical Specifications—Westinghouse Plants,” Revision 2. The proposed action is in accordance with the licensee's application dated February 25, 2005, as supplemented by letters dated November 11, 2005, April 19, September 9, October 24, and December 7, 2006. The Need for the Proposed Action The Commission's “Proposed Policy Statement on Technical Specifications Improvements for Nuclear Power Reactors” (52 FR 3788), dated February 6, 1987, contained an Interim Policy Statement that set forth objective criteria for determining which regulatory requirements and operating restrictions should be included in the Technical Specifications

(TSs)for nuclear power plants. When it issued the Interim Policy Statement, the Commission also requested comments on it. Subsequently, to implement the Interim Policy Statement, each reactor vendor owners group and the NRC staff began developing standard TSs

(STSs)for reactors supplied by each vendor. The Commission then published its “Final Policy Statement on Technical Specifications Improvements for Nuclear Power Reactors” (58 FR 39132), dated July 22, 1993, in which it addressed comments received on the Interim Policy Statement, and incorporated experience in developing the STSs. The Final Policy Statement formed the basis for a revision to 10 CFR 50.36 (60 FR 36953), dated July 19, 1995, that codified the criteria for determining the content of TSs. The NRC Committee to Review Generic Requirements reviewed the STSs, made note of their safety merits, and indicated its support of conversion by operating plants to the STSs. For BVPS-1 and 2, NUREG-1431 documents the STSs and forms the basis for the BVPS-1 and 2 conversion to the ITSs. The proposed changes to the CTSs are based on NUREG-1431 and the guidance provided in the Final Policy Statement. The objective of this action is to rewrite, reformat, and streamline the CTSs (i.e., to convert the CTSs to the ITSs). Emphasis was placed on human factors principles to improve clarity and understanding. Some specifications in the CTSs would be relocated. Such relocated specifications would include those requirements which do not meet the 10 CFR 50.36 selection criteria. These requirements may be relocated to the TS Bases document, the BVPS-1 and 2 Updated Final Safety Analysis Report, the Core Operating Limits Report, the operational quality assurance plan, plant procedures, or other licensee-controlled documents. Relocating requirements to licensee-controlled documents does not eliminate them, but rather places them under more appropriate regulatory controls (i.e., 10 CFR 50.54(a)(3), and 10 CFR 50.59) to manage their implementation and future changes. Environmental Impacts of the Proposed Action The NRC staff has completed its evaluation of the proposed action and concludes that the conversion to ITSs would not increase the probability or consequences of accidents previously analyzed and would not affect facility radiation levels or facility radiological effluents. The proposed action will not increase the probability or consequences of accidents. No changes are being made in the types of effluents that may be released off site. There is no significant increase in the amount of any effluent released off site. There is no significant increase in occupational or public radiation exposure. Therefore, there are no significant radiological environmental impacts associated with the proposed action. With regard to potential non-radiological impacts, the proposed action does not have a potential to affect any historic sites because no previously undisturbed area will be affected by the proposed amendment. The proposed action does not affect non-radiological plant effluents and has no other effect on the environment. Therefore, there are no significant non-radiological environmental impacts associated with the proposed action. Accordingly, the NRC staff concludes that there are no significant environmental impacts associated with the proposed action and, thus, the proposed action will not have any significant impact to the human environment. Environmental Impacts of the Alternatives to the Proposed Action As an alternative to the proposed action, the NRC staff considered denial of the proposed action (i.e., the “no-action” alternative). Denial of the application would result in no change in current environmental impacts. Thus, the environmental impacts of the proposed action and the alternative action are similar. Alternative Use of Resources The action does not involve the use of any different resources than those previously considered in the Final Environmental Statement for BVPS-1 and 2 dated July 1973 and September 1985, respectively. Agencies and Persons Consulted In accordance with its stated policy, on January 23, 2007, the NRC staff consulted with the Pennsylvania State official, Lawrence Ryan, of the Pennsylvania Department of Environmental Protection, regarding the environmental impact of the proposed action. The State official had no comments. Finding of No Significant Impact On the basis of the environmental assessment, the NRC concludes that the proposed action will not have a significant effect on the quality of the human environment. Accordingly, the NRC has determined not to prepare an environmental impact statement for the proposed action. For further details with respect to the proposed action, see the licensee's letter dated June 29, 2005, as supplemented by letters dated February 25, 2005, as supplemented by letters dated November 11, 2005, April 19, September 9, October 24, and December 7, 2006, and the information provided to the NRC staff through the joint NRC/BVPS ITS Conversion web page. Documents may be examined, and/or copied for a fee, at the NRC's Public Document Room (PDR), located at One White Flint North, Public File Area 01F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible electronically from the Agencywide Documents Access and Management System (ADAMS) Public Electronic Reading Room on the internet at the NRC Web site, *http://www.nrc.gov/reading-rm/adams/adams.html.* Persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS, should contact the NRC PDR Reference staff by telephone at 1-800-397-4209 or 301-415-4737, or by e-mail to *pdr@nrc.gov.* Dated at Rockville, Maryland, this 25th day of January 2007. For The Nuclear Regulatory Commission. Nadiyah S. Morgan, Project Manager, Plant Licensing Branch I-1, Division of Operating Reactor Licensing, Office of Nuclear Reactor Regulation. [FR Doc. E7-2373 Filed 2-9-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [Docket Nos. 50-259, 50-260, and 50-296] Tennessee Valley Authority; Browns Ferry Nuclear Plant; Final Environmental Assessment and Finding of No Significant Impact Related to the Proposed License Amendment To Increase the Maximum Reactor Power Level AGENCY: U.S. Nuclear Regulatory Commission (NRC). SUMMARY: The NRC has prepared a final Environmental Assessment

(EA)of its evaluation of a request by the Tennessee Valley Authority

(TVA)for license amendments to increase the maximum thermal power at Browns Ferry Nuclear Plant

(BFN)from 3458 megawatts-thermal

(MWt)to 3952 MWt for Units 2 and 3 and from 3293 MWt to 3952 MWt for Unit 1. These represent power increases of approximately 15 percent for BFN Units 2 and 3 and 20 percent for BFN Unit 1. As stated in the NRC staff's position paper dated February 8, 1996, on the Boiling-Water Reactor

(BWR)Extended Power Uprate

(EPU)Program, the NRC staff would prepare an environmental impact statement if it believes a power uprate would have a significant impact on the human environment. The NRC staff did not identify any significant impact from the information provided in the licensee's EPU applications for BFN Units 1, 2, and 3 or from the NRC staff's independent review; therefore, as required by Title 10 of the *Code of Federal Regulations* (10 CFR), the NRC staff is issuing this EA and Finding of No Significant Impact. The NRC published a draft EA and finding of no significant impact on the proposed action for public comment in the **Federal Register** on November 6, 2006 (71 FR 65009). Two sets of comments were received as discussed below. The licensee provided a comment in a letter dated December 5, 2006 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML063390663). The comment clarified that upon increasing discharge temperatures, TVA would take action to ensure that the discharge temperature would not exceed the National Pollutant Discharge Elimination System (NPDES) permit effluent limitations. The language in the EA has been modified in response to this comment. The U.S. Department of the Interior, Fish and Wildlife Service provided comments in a letter dated December 13, 2006 (ADAMS Accession No. ML063610349). In the letter, a concern is expressed about any trend toward prolonged higher temperatures and poor water quality conditions in Wheeler Reservoir as a result of the proposed licensing action. The letter indicates that this concern is being addressed by the continuing monitoring programs and data collection implemented by TVA. The letter did not identify any impact on the EA conclusions based on this concern. Therefore, the EA was not modified due to this comment letter. Environmental Assessment Plant Site and Environs BFN is located on approximately 340 ha (840 ac) of Federally owned land that is under the custody of the TVA in Limestone County, Alabama. The EPU would apply to facilities at the BFN site, which is located in northern Alabama on the northern shore of Wheeler Reservoir, an impoundment of the Tennessee River, at Tennessee River Mile

(TRM)294. The BFN site is approximately 16 km (10 mi) south of Athens, Alabama; 16 km (10 mi) northwest of Decatur, Alabama; and 48 km (30 mi) west of Huntsville, Alabama. Land in the vicinity of BFN is used primarily for agriculture. Population densities are low, with no population centers of significance within 16 km (10 mi) of the plant. The site is surrounded to the north and east by rural countryside. It includes open pasture lands, scattered farmsteads, few residents, and little industry within several miles. The terrain is gently rolling with open views to higher elevations to the north. The southern and western sides of the plant site abut the Wheeler Reservoir, which is a wide expanse of open river used for a variety of recreational purposes. The reservoir in the vicinity of the plant site is moderately used by recreational boaters and fishermen. There are no homes within the foreground viewing distance to the north and east. However, adjacent to the plant site several developments have partial views of the site—a small residential development is sited to the northwest and another across the Wheeler Reservoir to the southwest, and the Mallard Creek public use area is directly across the reservoir. A berm, graded during the initial construction of the plant site and containing approximately 2.5 million m 3 (3.3 million yd 3 ) of earth excavated to make cooling water channels, lies adjacent to the cooling tower complex and blocks views of the northern and eastern plant areas. Two wildlife management areas—Swan Creek State Wildlife Management Area and Mallard-Fox Creek State Wildlife Management Area—are within 5 km (3 mi) of the BFN site. The Swan Creek Wildlife Management Area includes 1232 ha (3045 ac) of land and 2357 ha (5825 ac) of water surrounded by numerous industrial facilities. The Mallard-Fox Creek State Wildlife Management Area encompasses approximately 593 ha (1483 ac) and is used primarily for small game hunting. The Round Island Recreation Area, a site on the Central Loop of the North Alabama Birding Trail, is located approximately 5.6 km (3.5 mi) upstream of BFN on the northern side of the Tennessee River and provides birding opportunities and boat access. BFN has two active nuclear reactor units (Units 2 and 3) and one inactive unit (Unit 1). Each unit includes a BWR and a steam-driven turbine generator manufactured by General Electric Company. Each unit originally was licensed for an output of 3293 MWt, with a design net electric rating of 1065 megawatts-electric (MWe). Major construction on BFN, TVA's first nuclear power plant, began in 1967. Commercial operation began in 1974 for Unit 1, in 1975 for Unit 2, and in 1977 for Unit 3. All three units were shut down in 1985 during a review of the TVA nuclear power program. Unit 2 returned to service in May 1991, and Unit 3 resumed operation in November 1995. Work began in 2002 to bring Unit 1 up to current standards, and the reactor is currently scheduled to restart in 2007. Wheeler Reservoir on the Tennessee River is the source for cooling water and most of the auxiliary water systems for BFN. The intake forebay is separated from Wheeler Reservoir by a structure with three bays, each with a gate that can be raised or lowered depending on the operational requirements of the plant. Beyond the forebay are 18 intake pumping station bays (6 per reactor unit) each with traveling screens. The BFN units are normally cooled by pumping water from Wheeler Reservoir into the turbine generator condensers and discharging it back to the reservoir via three large submerged diffuser pipes that are perforated to maximize uniform mixing into the flow stream. This straight-through flow path is known as “open cycle” or “open mode” operation. As originally designed, the maximum thermal discharge from the once-through cooling water system is directed into the Wheeler Reservoir, with a temperature increase across the intake and discharge of 13.9 °C (25 °F). The flow exits the diffusers and mixes with the reservoir flow. At the edge of the discharge mixing zone, the water temperature is required to be less than 5.6 °C (10 °F) above ambient water temperature. Through various gates, some of this cooling water can also be directed through cooling towers to reduce its temperature as necessary to comply with environmental regulations. This flow path is known as the “helper mode” operation. The capability also exists to recycle cooling water from the cooling towers directly back to the intake structure without being discharged to the reservoir. This flow path, known as the “closed mode” of operation, has not been used since the restart of Units 2 and 3 because of difficulties in meeting temperature limits in summer months and problems with equipment reliability. TVA does not anticipate using this mode in the future, and no procedures for operating in this mode currently exist. In recent years, only Units 2 and 3 have been operated, but because of a combination of system upgrades and improved flow calibrations, the measured total per-unit condenser cooling water

(CCW)flow rate in open mode (with three CCW pumps per unit) has increased. The condenser tubes were replaced with stainless steel tubing that has a larger internal diameter and lower flow resistance. This modification increased flow through the condenser by approximately 6 percent. TVA estimates total intake for three-unit operation in open mode to be 139 m 3 /s (4907 cfs) or 12,000 m 3 /d (3171 million gallons per day). Because of various system limitations, BFN cannot pass all the CCW through the cooling towers when operating in the helper mode. The fraction of cooling water that cannot be passed through the cooling towers is routed directly to the river. Also, almost all of the cooling water that passes through the cooling towers is returned to the river, but a small amount is lost to the atmosphere during operation. If cooling tower capacity is increased due to the EPU, this consumptive use could increase proportionally. The cooling towers are only operated when necessary, typically a few weeks during the hottest part of the summer (usually July and August), to meet thermal discharge temperature limits. The residual heat removal service water (RHRSW) system consists of four pairs of pumps located on the intake structure for pumping river water to the heat exchangers in the RHRSW system and four additional pumps for supplying water to the emergency equipment cooling water

(EECW)system. The EECW system distributes cooling water supplied by the RHRSW system to essential equipment during normal and accident conditions. Identification of the Proposed Action By letters dated June 25 and June 28, 2004, TVA proposed amendments to the operating licenses for BFN Units 2 and 3 and for BFN Unit 1, respectively, to increase the maximum thermal power level by approximately 15 percent for Units 2 and 3, from 3458 MWt to 3952 MWt, and by approximately 20 percent for Unit 1, from 3293 MWt to 3952 MWt. The change is considered an EPU because it would raise the reactor core power levels more than 7-percent above the originally licensed maximum power levels. This amendment would allow the heat output of the reactors to increase, which would increase the flow of steam to the turbines. This would increase production of electricity and the amount of waste heat delivered to the condensers, and increase the temperature of the water being discharged into the Wheeler Reservoir. On September 8, 1998, the NRC approved license amendments for power uprates of 5 percent for BFN Units 2 and 3. BFN Units 2 and 3 are currently operating at 105 percent of their originally licensed thermal power (an increase from 3293 MWt to 3458 MWt). Therefore, the proposed EPUs analyzed in this EA are 15 percent for Units 2 and 3 and 20 percent for Unit 1, which is currently licensed to operate at 100 percent of its originally licensed thermal power (3293 MWt). The Need for the Proposed Action The proposed action would meet the increasing demand for bulk power resulting from the economic growth in the TVA service area. Such economic growth is forecasted to continue in the Tennessee Valley region resulting in an estimated average annual increase of 1.6 percent in the regional energy demand over the next 20 years. Such demand increases would exceed TVA's capacity to generate electricity for its customers. The proposed EPUs would add approximately 600 MWe to the historical generating capacity of BFN; such additional capacity should provide a cost-effective means of meeting the projected increased demand. The EPUs can be implemented without substantial capital investment and would not cause the environmental impacts that would occur if construction of a new power-generation facility was sought to meet the region's electricity needs. Environmental Impacts of the Proposed Action At the time of issuance of the operating licenses for BFN, the NRC staff noted that any activity authorized by the licenses would be encompassed by the overall action evaluated in the Final Environmental Statement

(FES)for the operation of BFN that was issued in September 1972. This EA summarizes the non-radiological and radiological impacts in the environment that may result from the proposed action of the EPU. Non-Radiological Impacts Land Use Impacts The potential impacts associated with land use for the proposed action include effects from construction and plant modifications. While some plant components would be modified, all plant changes related to the EPUs would occur within existing structures, buildings, and fenced equipment yards housing the major unit components. Also, the EPU would use existing parking lots, road access, lay-down areas, offices, workshops, warehouses, and restrooms. Therefore, no land use would change at BFN. Also, no land use would change along transmission lines (no new lines would be required for EPU), transmission corridors, switch yards, or substations. According to the SEIS for license renewal of BFN, the only significant cultural resources in the proximity of BFN are site 1Li535 and the Cox Cemetery, which was moved to accommodate original construction of the plant. TVA has procedures in place to ensure that the operation of BFN would protect undiscovered historic or archaeological resources, and the proposed action would not change such procedures. The EPUs and continued operation of BFN Units 1, 2, and 3 would remain in the scope of the original FES, and therefore, the staff concludes potential impacts to land use and to historic and archaeological resources from the proposed action are bounded by the impacts previously evaluated in the FES. Cooling Tower Impacts In support of the EPUs, operation frequency of the cooling towers would likely increase to approximately 7.2 percent of the time to meet thermal discharge requirements of the NPDES permit. The potential impacts from increased use of the cooling towers would be negligible to minor. The impacts would be increased noise directly proportional to the increased usage frequency. The towers may produce more noise and longer periods of noise due to the increased cooling tower operation, but other background noise, such as traffic, insects, frogs, and air conditioners, dominated TVA's June 2001 background noise survey. There are two neighborhoods in close proximity to BFN. The estimated background noise in the two neighborhoods, Paradise Shores and Lakeview, with six cooling towers operating would be approximately 52 and 48 decibels, respectively. These values are below the U.S. Environmental Protection Agency's (EPA's) recommended level of 55 decibels for the annual equivalent sound level day/night. Therefore, noise increases are not expected to have a noticeable effect on nearby residents. Conclusions reached in NUREG-1437, *Generic Environmental Impact Statement for License Renewal of Nuclear Plants* (GEIS), apply to the proposed action regarding cooling tower impacts on crops, ornamental vegetation, and native plants. The conclusions state that salt drift, icing, fogging, or increased humidity resulting from cooling tower operation would not be significant. These same conclusions apply for the period of operation prior to entry into the renewed operating license period. Additionally, as stated in the SEIS, the BFN cooling towers would be operated as helper towers and, therefore, would be operated less frequently than at plants with continuous cooling tower operation. However, since the publication of the NRC's SEIS, TVA has proposed a design change for the future sixth cooling tower, which would result in slightly increased frequency of cooling tower operation than the originally planned 20-cell tower. Nonetheless, cooling tower operation at BFN with all three units operating at EPU levels would still be operated less frequently than at plants with continuous cooling tower operation. Likewise, the conclusion reached in the GEIS regarding aesthetics of cooling tower operation applies to the BFN helper towers. In addition to increased noise, increased operation of cooling towers may have an aesthetic effect in that a visible plume would be detectable more days of the year. However, the conclusions in the GEIS state that continuously operated cooling towers would not have significant effects on visible and audible aesthetics; therefore, the proposed action, including the increased use of helper towers, would not significantly affect aesthetics. This conclusion also applies to operation both prior to the renewed operating license period and during the renewed operating license period. The proposed EPU would increase the number of days of operation of the cooling towers, which may increase the number of days experiencing background noise, fogging, icing, increased humidity, and a visible plume. Although the frequency of cooling tower operation would increase, the helper towers would be used only intermittently. Therefore, the staff concludes impacts of operating cooling towers would not be significant for the proposed action. Transmission Facility Impacts The potential impacts associated with transmission facilities for the proposed action include changes in transmission line corridor right-of-way maintenance and electric shock hazards due to increased current. No change in right-of-way maintenance, including vegetative management, would occur as a result of the EPU. The proposed EPU would increase the current, which would affect the electromagnetic field, but would not increase the voltage. Because the voltage would not change, there would be no change in the potential for electric shock. The National Electric Safety Code

(NESC)provides design criteria that limit hazards from steady-state currents. The NESC limits the short-circuit current to the ground to less than 5 mA. There would be an increase in current passing through the transmission lines associated with the increased power level of the proposed EPU. The increased electrical current passing through the transmission lines would cause an increase in electromagnetic field strength. Transmission lines would continue to meet applicable shock prevention provisions of the NESC. Although the U.S. has no guidelines for exposure to power frequency electromagnetic fields, Florida and New York have guidelines based on maximum load-carrying conditions. Under conditions of increased EPU currents, TVA transmission lines would continue to meet such guidelines. No data exist to suggest that higher electromagnetic fields adversely affect human health or flora and fauna. The impacts associated with transmission facilities for the proposed action would not change significantly relative to the impacts from current plant operation. There would be no physical modifications to the transmission lines, transmission line right-of-way maintenance practices would not change, there would be no changes to transmission line rights-of-way or vertical clearances, and electric current passing through the transmission lines would increase only slightly. Therefore, the staff concludes there would be no significant impacts associated with transmission lines for the proposed action. Water Use Impacts Potential water use impacts from the proposed action include hydrological alterations to the Wheeler Reservoir on the Tennessee River and changes to plant water supply. No changes to the plant intake system are expected due to the proposed action; therefore, the volume of intake water would not change. Therefore, the staff concludes that there would be no significant alteration of the hydrology of the Wheeler Reservoir or the plant's water supply. In addition to the once-through cooling system, BFN has five mechanical draft cooling towers that operate during helper mode. In conjunction with the restart of Unit 1, TVA has committed to building a replacement for the sixth cooling tower; the replacement tower would have a heat removal capacity greater than or equal to that of existing cooling tower #3. BFN typically enters helper mode during the hot summer months, and the cooling towers are operated only when necessary to meet the NPDES permit's thermal discharge limits. With the restart of Unit 1, if more than six circulating water pumps are operating, some flow must bypass the cooling towers and enter the river directly due to system limitations. Only about 2 percent of the cooling tower flow is not returned to the river due to evaporation and drift. BFN's consumptive water use consists of a negligible, unquantifiable amount that would not change detectably as a result of the EPU. Therefore, the staff concludes there would be no significant impacts to water use in the Wheeler Reservoir or the Tennessee River for the proposed action. Discharge Impacts Potential impacts to the Wheeler Reservoir from the BFN discharge include increased turbidity, scouring, erosion, and sedimentation. These discharge-related impacts apply to open-cycle flow due to the large volume of water discharged to the reservoir. However, since the EPU at BFN would not alter the intake volume of water, no significant change in discharge volume is anticipated. Therefore, no significant impacts from increased turbidity, scouring, erosion, and sedimentation are expected. Surface runoff and wastewater discharges at BFN are regulated by the State of Alabama via a NPDES permit (NPDES No. AL0022080). The permit is periodically reviewed and renewed by the ADEM. With the exception of discharge temperature, the EPU would not be expected to alter any other effluents, such as yard drainage, station sumps, and sewage treatment. Increase in discharge temperature in the Wheeler Reservoir would remain within the NPDES permit limits due to the implementation of cooling towers in helping mode or derating the units during hot summer months. BFN's current NPDES permit limits thermal discharge, as detected at a depth of 5 feet at the end of a 2400-foot mixing zone downstream of the discharge diffusers, to a maximum 1-hour average of 93 °F, a maximum 24-hour average of 90 °F, and a maximum increase of 10 °F over ambient temperatures. Currently with Units 2 and 3 operating at 105 percent of the originally licensed maximum power level in open mode, the approximate temperature increase at the end of the mixing zone is 5.3 °F. Operation of all three units at 120-percent power is predicted to increase the mean water temperature at the end of the mixing zone by about 0.5 °F compared to current operations and only 0.3 °F when compared to all three units operating at their original power level as assessed in the FES. Increase in discharge temperature approaching the NPDES limits would trigger operation of the cooling towers in helper mode. If operation of the cooling towers is insufficient to reduce discharge temperature enough to remain within the NPDES compliance, the units would be derated so that the discharge temperature does not exceed the permit's limits. It is estimated that three-unit operation with the EPU would increase cooling-tower-operation frequency to about 7.2 percent and would result in derating approximately 0.29 percent of the time. It is expected that such operational controls would maintain compliance with the NPDES permit. When the plant is operating within the permit limits, it is expected that thermal discharge would not have significant individual or cumulative effects on reservoir stratification, dissolved oxygen concentrations, and eutrophication. The proposed EPU would not result in changes in any other effluents, which are currently within permit limits. Therefore, the staff concludes that the proposed action would not result in any significant impacts on the Wheeler Reservoir or the Tennessee River from BFN discharge. Impacts on Aquatic Biota The potential impacts to aquatic biota from the proposed action include impingement, entrainment, thermal discharge effects, and impacts due to transmission line right-of-way maintenance. The BFN has intake and discharge structures on the Wheeler Reservoir. The aquatic species evaluated in this EA are those in the vicinity of the intake and discharge structures. Entrainment and impingement of aquatic species at BFN are limited by the NPDES permit. TVA conducted a pre-operational and operational study to collect data describing ichthyoplankton populations in the Wheeler Reservoir from 1971 through 1979. The results of the study indicated that, under open-cycle, three-unit operation, entrainment would not increase mortality significantly beyond the expected levels of natural mortality of fish eggs and larvae and that impingement would not adversely affect the fish community in the Wheeler Reservoir. TVA also conducted flow studies at BFN; the studies indicated that most entrained water originates on the eastern side of the main river channel. This area has lower densities of fish larvae than in overbank areas. Fish eggs (mostly from freshwater drum [ *Aplodinotus grunniens* ]) are found in the main channel at higher densities, but abundance of freshwater drum has not decreased noticeably. With the return of three-unit operation at 120-percent power for each unit, entrainment and impingement would increase slightly due to the increased flow rate of CCW. TVA's Vital Signs monitoring program currently being conducted would continue after the return of three-unit operation. In addition to assessing impacts from entrainment and impingement of fish populations in the Wheeler Reservoir, the monitoring program addresses effects on fish population dynamics and commercial and recreational fisheries as needed. The staff has determined that slight increases in entrainment and impingement as a result of the proposed action would not have significant impacts on species abundance or on the Wheeler Reservoir fish community. On July 9, 2004, EPA published a final rule in the **Federal Register** (69 FR 41575) addressing cooling water intake structures at existing power plants whose flow levels exceed a minimum threshold value of 50 million gallons per day. The rule is Phase II in EPA's development of 316(b) regulations that establish national requirements applicable to the location, design, construction, and capacity of cooling water intake structures at existing facilities that exceed the threshold value for water withdrawals. The national requirements, which are imposed with NPDES permits, minimize the adverse environmental impacts associated with the continued use of the intake systems. Licensees are required to demonstrate compliance with the Phase II performance standards to renew their NPDES permits. TVA is currently conducting entrainment and impingement studies at BFN in compliance with the Phase II rule. Fish have the ability to detect thermal changes and actively avoid areas with elevated water temperature near the BFN diffusers. Thermal modeling shows that the bank opposite the BFN diffusers would not be affected by the thermal plume and, therefore, would allow passage for migrating fish. Known fish hosts for the protected freshwater mussels (see section below describing impacts on threatened and endangered species) are common in the Wheeler Reservoir. Most fish host species in the reservoir have upper lethal temperature limits that are higher than the BFN thermal variance of 90 °F. Studies on the least thermally tolerant species, sauger ( *Stizostedion vitreum* ) and yellow perch ( *Perca flavescens* ), showed that BFN had no significant, adverse impacts on reproduction of either species or on the annual sauger migration past BFN for spawning (Baxter and Buchanan 1998). Most larvae and eggs drifting past BFN are demersal and would have very little exposure to the thermal plume due to rapid mixing with the ambient surface water and rising of the heated water. Therefore, the thermal plume associated with the proposed EPU is not expected to affect adversely any life history stages of freshwater mussels or their host species. The NPDES permit limits the amount of heat discharged to the Wheeler Reservoir from the operation of BFN. The thermal limits specified in the NPDES permit (as discussed above in discharge impacts section) would not change with implementation of the EPU. Because TVA would continue to meet the thermal limits set in the NPDES permit, whether in open cycle, in helper mode, or via power derating, the proposed action is not expected to result in additional thermal discharge effects on aquatic species in the Wheeler Reservoir. As discussed in the transmission facility impacts section of this EA, transmission line right-of-way maintenance practices would not change for the proposed action. Therefore, the staff concludes that there would be no significant impacts to aquatic species associated with transmission line right-of-way maintenance for the proposed action. Impacts on Terrestrial Biota The proposed action would not include any new land disturbance or changes in transmission line right-of-way maintenance. Most areas at BFN are not pristine and continue to provide habitat only for species with widespread distributions; the wildlife diversity at BFN is not great. No rare terrestrial species occur in the vicinity of BFN. Although wetlands do occur at the BFN site (25 acres according to the National Wetlands Inventory and 12 acres according to the Federal jurisdictional criteria), none of the wetlands would be affected by the proposed action. Therefore, the staff concludes that there would be no significant impacts to terrestrial species or their habitat associated with the proposed action, including transmission line right-of-way maintenance. Impacts on Threatened and Endangered Species Potential impacts to threatened and endangered species from the proposed action include the impacts assessed in the aquatic and terrestrial biota sections of this environmental assessment. These impacts include impingement, entrainment, thermal discharge effects, and impacts due to transmission line right-of-way maintenance for aquatic and terrestrial species. There are seven species listed as threatened or endangered under the Federal Endangered Species Act that occur within Limestone County, Alabama. The listed terrestrial species include the endangered gray bat ( *Myotis grisescens* ) and the endangered Indiana bat ( *M. sodalis* ). These two species are not known to occur within three miles of BFN. As no significant impacts are expected to terrestrial species or their habitat, the proposed action would not have significant impacts on the gray or Indiana bats or their habitats. There are five Federally endangered aquatic species that occur within the vicinity of BFN. The rough pigtoe ( *Pleurobema plenum* ) and the pink mucket ( *Lampsilis abrupta* ) are freshwater mussels that have been reported to occur in areas upstream from BFN. It is unlikely that these species would occur in areas near the thermal plume or downstream of BFN; therefore, effects on the rough pigtoe, the pink mucket, their habitats, or their fish host species (see aquatic biota section above describing impacts on host species) are not expected to result from the proposed action. The three other Federally listed aquatic species are endangered snails: armored snail ( *Pyrgulopsis pachyta* ), slender campeloma ( *Campeloma decampi* ), and Anthony's river snail ( *Athearnia anthonyi* ). All three Federally endangered aquatic snails are found only in tributaries to the Wheeler Reservoir that are located upstream of BFN; therefore, no significant impacts on these snails are expected from the proposed aciton. No Federally listed fish species or critical habitat are known to occur within the vicinity of BFN. TVA's Vital Signs monitoring program and Regional Natural Heritage Program would continue acting as tools for identification of protected species and habitat at BFN. The staff concludes that there would be no significant effects on Federally threatened or endangered species as a result of the proposed action. Socioeconomic Impacts Potential social and economic impacts due to the proposed action include changes in the payments in lieu of taxes for Limestone County and changes in the size of the workforce at BFN. The NRC staff has reviewed the information provided by the licensee regarding socioeconomic impacts. Because BFN changes in conjunction with the proposed action would occur during a planned outage, the proposed action would not result in any additional changes in the workforce. For all planned outages, which typically last about 35 days, employment at BFN would increase by about 1000 people at most. Due to the short-term need for increased employment, it is not expected that workers would move into the local area for such temporary employment. The maximum employment during an outage would be about 3.1 percent of Limestone County's current labor force, which was about 32,690 in 2003. For the primary labor market area, which includes Huntsville, Decatur, and Florence, BFN outages would employ about 0.3 percent of the labor force, which was about 318,800 in 2003. Therefore, the proposed EPU would not affect significantly the size of the BFN labor force as the modifications would occur during planned outages and would not increase the size of permanent employment at BFN. Accordingly, the proposed action would not have measurable effects on annual earnings and income in Limestone County or on community services due to the very small and insignificant impact on the local population. The Limestone County population is about 17.6 percent minority, which is well below both the state and national minority populations, 29.7 and 30.9 percent, respectively. The labor market minority population is about 22.1 percent. The poverty rates in Limestone County and the labor market area are 12.3 percent and 12.1 percent, respectively, which are lower than the state's average of 16.1 percent and about the same as the nation's average of 12.4 percent. Therefore, due to the low minority population, low poverty rate, and lack of significant environmental impacts resulting from the proposed action, the proposed EPU would not have disproportionate negative impacts to minority and low-income populations. In compliance with Section 13 of the TVA Act, TVA makes payments in lieu of property taxes to states and counties in which its power operations occur and in which its acquired properties were subject to state and county taxation previous to their acquisition by TVA. For such payments, TVA pays 5 percent of its gross power revenues to appropriate states and counties, with most of the money paid to the states, which redistribute the payments to local governments. The proposed action would affect the in-lieu-of-tax payments because the total amount of money to be distributed increases as power generation increases and because the EPU would increase BFN's value, thus resulting in a larger allocation of the payment to Limestone County. Because the proposed EPU would increase the economic viability of BFN, the probability of early plant retirement would be reduced. Early plant retirement would be expected to have negative impacts on the local economy and the community by reducing in-lieu-of-tax payments and limiting local employment opportunities for the long term. While the proposed action would not affect the labor force significantly, there would be no disproportionate impacts on minority or low-income populations. Additionally, the proposed EPU would increase the in-lieu-of-tax payments received by Limestone County, increase the book value of BFN, and increase the long-term viability of BFN. Therefore, the staff concludes that there would be no significant socioeconomic impacts associated with the proposed action. Summary The proposed EPU would not result in a significant change in non-radiological impacts in the areas of land use, cooling tower operation, transmission facility operation, water use, waste discharges, aquatic and terrestrial biota, or socioeconomic factors. No other non-radiological impacts were identified or would be expected. Table 1 summarizes the non-radiological environmental impacts of the proposed EPU at BFN. Table 1.—Summary of Non-Radiological Environmental Impacts Land Use No significant land-use modifications. Cooling Tower No significant aesthetic impacts; slightly larger visible plume and increased noise due to more frequent operation; no significant fogging or icing. Transmission Facilities No physical modifications to transmission lines; lines meet shock safety requirements; no changes to right-of-ways; small increase in electrical current would cause small increase in electromagnetic field around transmission lines; no changes to voltage. Water Use No configuration change to intake structure; no increased volume of water withdrawal; increase in flow rate of condenser cooling water; slight increase in consumptive use due to evaporation; no water use conflicts. Discharge Increase in discharge water temperature; no increases in other effluents; discharge would remain within NPDES permit limits due to cooling tower operation and derating as necessary. Aquatic Biota Entrainment and impingement would increase slightly but are not expected to affect the fish community in Wheeler Reservoir. Terrestrial Biota No land disturbance or changes to transmission line right-of-way maintenance are expected; therefore, there would be no significant effects on terrestrial species or their habitat. Threatened and Endangered Species As for aquatic and terrestrial biota, no significant impacts are expected on protected species or their habitat. Socioeconomics No significant change in size of BFN labor force required for plant operation or for planned outages; proposed EPU would increase in-lieu-of-tax payments to Limestone County and book value of BFN; minority and low-income populations would not be disproportionately affected. Radiological Impacts Radioactive Waste Stream Impacts BFN uses waste treatment systems designed to collect, process, and dispose of gaseous, liquid, and solid wastes that might contain radioactive material in a safe and controlled manner such that discharges are in accordance with the requirements of Title 10 of the *Code of Federal Regulations* (10 CFR) Part 20, “Standards for Protection Against Radiation,” and 10 CFR Part 50, “Domestic Licensing of Production and Utilization Facilities,” Appendix I. Although there may be a small increase in the volume of radioactive waste and spent fuel, the proposed EPU would not result in changes in the operation or design of equipment in the gaseous, liquid, or solid waste systems. Gaseous Radioactive Waste and Offsite Doses During normal operation, the gaseous effluent treatment systems process and control the release of gaseous radioactive effluents to the environment, including small quantities of noble gases, halogens, tritium, and particulate material. The gaseous waste management systems include the offgas system and various building ventilation systems. The proposed EPU is expected to result in a 15-20 percent increase in gaseous effluents, which is still well within regulatory limits of Appendix I to 10 CFR Part 50. Therefore, the increase in offsite dose due to gaseous effluent release following the EPU would not be significant. Liquid Radioactive Waste and Offsite Doses During normal operation, the liquid effluent treatment systems process and control the release of liquid radioactive effluents to the environment, such that the doses to individuals offsite are maintained within the limits of 10 CFR Part 20 and 10 CFR Part 50, Appendix I. The liquid radioactive waste systems are designed to process the waste and then recycle it within the plant as condensate, reprocess it through the radioactive waste system for further purification, or discharge it to the environment as liquid radioactive waste effluent in accordance with State and Federal regulations. Although no changes to the liquid radioactive waste processing and disposition at BFN are expected to occur with the EPU, TVA does expect a small increase in the volume to be processed. The projected liquid effluents would be well within the regulatory limits under the proposed action. Therefore, there would not be a significant environmental impact from the additional volume of liquid radioactive waste generated following the EPU. Solid Radioactive Wastes The solid radioactive waste system collects, processes, packages, and temporarily stores radioactive dry and wet solid wastes prior to shipment offsite and permanent disposal. The proposed EPU would generate 15-20 percent more radioactive resin, resulting from the increased condensate demineralizer flow. Such an increase would not exceed BFN's capacity for radioactive waste treatment and storage. Modifications associated with the proposed action would generate a small amount of dry radioactive waste, which would remain within the range of solid waste currently generated and would not impact waste generation goals. The proposed action would increase the average batch size of fuel assemblies for refueling, but it would not affect BFN's schedule for spent fuel storage expansion. The number of dry storage casks required with the proposed EPU would increase by about 7 percent. Therefore, the increase in solid radioactive waste under the proposed action would not have a significant environmental impact. In-Plant Radiation Doses The proposed EPU would result in the production of more radioactive material and higher radiation dose rates in some areas at BFN. The annual average occupational radiation dose to an individual for BFN during the 1991-to-2000 period was 0.198 rem. The predicted occupational radiation dose for BFN with the proposed EPU could increase to almost 0.24 rem, which is about 5 percent of the 10 CFR part 20 limit for adult whole body occupational radiation dose. This estimate does not account for potential further reductions in dose due to As Low As Reasonably Achievable program initiatives and administrative dose level controls. Therefore, the proposed action is not expected to impact significantly the in-plant radiation doses. Direct Radiation Doses Offsite Direct radiation from radionuclides (mainly nitrogen-16) in the reactor water and the turbine building would increase linearly with the EPU. Such increase in radiation would be monitored at the on-site environmental thermoluminescent dosimeter

(TLD)stations at BFN. In the past, data from BFN's TLD stations have not indicated that any measurabale nitrogen-16 radiation could be detected off site. Therefore, it is unlikely that the small increase in radiation associated with the EPU would result in any measurable dose to the public. The annual whole body dose equivalent for liquid effluents to a member of the public beyond the site boundary is limited to 25 mrem (0.25 mSv) by 40 CFR 190. The projected maximum direct radiation dose offsite at BFN with the EPU is 0.065 mrem, which is only about 0.3 percent of the limit in 40 CFR 190. The liquid effluent dose limit for any organ is projected to be 0.94 mrem/year, which is only 0.4 percent of the 40 CFR 190 limit. Projected gaseous limits with the EPU would also remain well within limits, with each dose type reaching less than 0.2 percent of the limit. The licensee would continue to perform surveys as the EPU is implemented to ensure continued compliance with 40 CFR 190. Therefore, the direct radiation dose offsite at BFN with the EPU would not be significant and is not expected to affect human health. Postulated Accident Doses As a result of implementation of the proposed EPU, there is an increase in the source term used in the evaluation of some of the postulated accidents in the FES. The inventory of radionuclides in the reactor core is dependent upon power level; therefore, the core inventory of radionuclides could increase by as much as 20 percent. The concentration of radionuclides in the reactor coolant may also increase by as much as 20 percent; however, this concentration is limited by the BFN Technical Specifications. Therefore, the reactor coolant concentration of radionuclides would not be expected to increase significantly. This coolant concentration is part of the source term considered in some of the postulated accident analyses. Some of the radioactive waste streams and storage systems evaluated for postulated accidents may contain slightly higher quantities of radionuclides. In 2002, TVA requested a license amendment to allow the use of Alternate Source Term

(AST)methodology for design basis accident analyses for BFN Units 1, 2, and 3. TVA conducted full-scope AST analyses, which considered the core isotopic values for the current and future vendor products under EPU conditions. TVA concluded that the calculated post-accident offsite doses for the EPU using AST methodologies meet all the applicable acceptance criteria of 10 CFR 50.67 and Regulatory Guide 1.183. The NRC staff is reviewing the licensee's analyses and performing confirmatory calculations to verify the acceptability of the licensee's calculated doses under accident conditions. The results of the NRC staff's calculations will be presented in the safety evaluation to be issued with the license amendment, and the EPU would not be approved by NRC unless the NRC staff's independent review of dose calculations under postulated accident conditions determines that dose is within regulatory limits. Therefore, the NRC staff concludes that the EPU would not significantly increase the consequences of accidents and would not result in a significant increase in the radiological environmental impact of BFN from postulated accidents. Fuel Cycle and Transportation Impacts The environmental impacts of the fuel cycle and transportation of fuels and wastes are described in Tables S-3 and S-4 of 10 CFR 51.51 and 10 CFR 51.52, respectively. An additional NRC generic EA (53 FR 30355, dated August 11, 1988, as corrected by 53 FR 32322, dated August 24, 1988) evaluated the applicability of Tables S-3 and S-4 to higher burn-up cycle and concluded that there is no significant change in environmental impact from the parameters evaluated in Tables S-3 and S-4 for fuel cycles with uranium enrichments up to 5 weight percent uranium-235 and burn-ups less than 60,000 MWt days per metric ton of uranium-235 (MWd/MTU). Resulting from an interagency agreement in 2001 between TVA and the Department of Energy, 33 metric tons of highly enriched uranium will be obtained and blended down to allow use of the low enriched uranium as nuclear reactor fuel for BFN. With the use of blended low enriched uranium fuel, a higher percentage of uranium-236 exists. As a neutron poison, uranium-236 requires greater enrichment to compensate for reactivity loss. The number of fuel assemblies to be shipped would increase as would the associated handling doses. However, the burn-up limit and the uranium enrichment limit would stay within the 5 percent and the 60,000 Mwd/MTU limits. Therefore, the environmental impacts of the EPU would remain bounded by the impacts in Tables S-3 and S-4 and would not be significant. Summary The proposed EPU would not significantly increase the consequences of accidents, would not result in a significant increase in occupational or public radiation exposure, and would not result in significant additional fuel cycle environmental impacts. Accordingly, the Commission concludes that there would be no significant radiological environmental impacts associated with the proposed action. Table 2 summarizes the radiological environmental impacts of the proposed EPU at BFN. Table 2.—Summary of Radiological Environmental Impacts Gaseous Effluents and Doses Slight increase (by about 15-20 percent) in dose due to gaseous effluents; doses to individuals offsite would remain within NRC limits. Liquid Effluents and Doses Volume of liquid effluent generated and amount of radioactivity in the effluent are expected to increase slightly; discharges of liquid effluents would remain within NRC limits; however, no routine discharge of liquid effluent is expected. Solid Radioactive Waste Volume of solid waste expected to increase slightly due to more frequent change of demineralizer resins; increase in amount of spent fuel assemblies. In-plant Dose Occupational dose could increase by 20 percent overall; occupational doses would remain well within NRC limits. Direct Radiation Dose Up to 20 percent increase in production of nitrogen-16; however, dose rate at site boundary due to skyshine is not expected to increase significantly and would remain within NRC and EPA limits. Postulated Accidents Licensee using AST; doses would remain within NRC limits. Fuel Cycle and Transportation Impacts in Tables S-3 and S-4 in 10 CFR 51, “ENVIRONMENTAL PROTECTION REGULATIONS FOR DOMESTIC LICENSING AND RELATED REGULATORY FUNCTION” are bounding. Alternatives to Proposed Action As an alternative to the proposed action, the NRC staff considered denial of the proposed EPU (i.e., the “no-action” alternative). Denial of the application would result in no change in the current environmental impacts. However, if the EPU were not approved, other agencies and electric power organizations may be required to pursue other means of providing electric generation capacity to offset future demand. Fossil fuel plants routinely emit atmospheric pollutants, causing impacts in air quality that are larger than if BFN were to provide the same amount of electric generation. Construction and operation of a fossil fuel plant also create impacts in land use and waste management. Other alternatives, such as purchased electrical power, wind power, and hydropower, were considered during the NRC's review for the BFN license renewal. The proposed EPU, like license renewal, would incur fewer environmental costs than the alternatives considered. While the EPU would produce additional spent fuel, the additional amount of spent fuel would be stored in a new dry cask storage facility, which would be constructed even if the EPU were not approved. Therefore, the proposed EPU would not have significant environmental impacts. Alternative Use of Resources This action does not involve the use of any resources not previously considered in the SEIS. Agencies and Persons Consulted In accordance with its stated policy, on August 7, 2006, the NRC staff consulted with the Alabama State official, Mr. Kirk Whatley, of the Office of Radiation Control, regarding the environmental impacts of the proposed action. The State official had no comments. Finding of No Significant Impact On the basis of the EA, the Commission concludes that the proposed action would not have a significant effect on the quality of the human environment. Accordingly, the Commission has determined not to prepare an Environmental Impact Statement for the proposed action. For further details with respect to the proposed action, see the licensee's applications dated June 25 and June 28, 2004, as supplemented by letters dated August 23, 2004, February 23, April 25, June 6, and December 19, 2005, February 1 and 28, March 7, 9, 23, and 31, April 13, May 5 and 11, June 12, 15, 23 and 27, July 21, 26, and 31, August 4, 16, 18, and 31, September 1, 15, and 22, and October 3, 5, and 13, 2006. Documents may be examined, and/or copied for a fee, at the NRC's Public Document Room (PDR), located at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible electronically from the Agencywide Documents Access and Management System (ADAMS) Public Electronic Reading Room on the NRC Web site, *http://www.nrc.gov/reading-rm/adams.html.* Persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS should contact the NRC PDR Reference staff at 1-800-397-4209, or 301-415-4737, or send an e-mail to *pdr@nrc.gov.* Dated at Rockville, Maryland, this 6th day of February 2007. For the Nuclear Regulatory Commission. Timothy J. McGinty, Deputy Director, Division of Operating Reactor Licensing, Office of Nuclear Reactor Regulation. [FR Doc. E7-2342 Filed 2-9-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Final Regulatory Guides: Impending Issuance, Availability, and Applicability to New Reactor Licensing AGENCY: U.S. Nuclear Regulatory Commission. ACTION: Issuance, Availability, and Applicability of Final Regulatory Guides for New Reactor Licensing. SUMMARY: The U.S. Nuclear Regulatory Commission

(NRC)is currently reviewing and revising numerous guides in the agency's Regulatory Guide

(RG)Series. This series has been developed to describe, and make available to the public, methods that are acceptable to the NRC staff for implementing specific parts of the NRC's regulations, techniques that the staff uses in evaluating specific problems or postulated accidents, and data that the staff needs in its review of applications for permits and licenses. Availability And Dates The NRC will make each new or revised RG publicly available through the following electronic distribution channels: • The NRC's Electronic Reading Room on the agency's public Web site, in the Regulatory Guides document collection, at *http://www.nrc.gov/reading-rm/doc-collections/reg-guides/.* • The NRC's Agencywide Document Access and Management System (ADAMS), at *http://www.nrc.gov/reading-rm/adams.html* (using the ADAMS accession number specified in the footer on the first page of each regulatory guide). Please note that the NRC does not intend to distribute printed copies of these revised RGs unless specifically requested on an individual basis with adequate justification. Requests for single copies should be made in writing to the U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Reproduction and Distribution Services Section; by e-mail to *DISTRIBUTION@nrc.gov;* or by fax to

(301)415-2289. Telephone requests cannot be accommodated. In addition, the NRC does not intend to issue separate notices of issuance and availability. Consequently, interested parties should regularly peruse the previously specified electronic distribution channels to identify newly revised RGs. RGs are not copyrighted, and Commission approval is not required to reproduce them. Copies of each RG and other related publicly available documents, including public comments received, can be viewed electronically on computers in the NRC's Public Document Room (PDR), which is located at One White Flint North, 11555 Rockville Pike, Rockville, Maryland, Room O-1 F21, and is open to the public on Federal workdays from 7:45 a.m. until 4:15 p.m. The PDR reproduction contractor will make copies of documents for a fee. Selected documents, including public comments on the DGs, can also be viewed and downloaded electronically via ADAMS at *http://www.nrc.gov/NRC/reading-rm/adams.html.* If you do not have access to ADAMS or if you encounter problems in accessing the documents stored in ADAMS, contact the PDR Reference Staff at

(800)397-4209 or

(301)415-4737, or by e-mail to *PDR@nrc.gov.* SUPPLEMENTARY INFORMATION: The revised versions of the RGs will not be used as a backfit to any previously issued staff position for existing nuclear power reactors. The purpose of the ongoing revision of the NRC's RGs is to ensure that prospective applicants have complete, accurate, and current guidance for use in preparing early site permit (ESP), design certification (DC), and combined license

(COL)applications for proposed new reactors. In particular, the NRC staff ensures that the agency's regulatory guidance is consistent with the rulemaking, “Licenses, Certifications, and Approvals for Nuclear Power Plants” (Title 10, Part 52, of the *Code of Federal Regulations* (10 CFR part 52)). The proposed rule was published in the **Federal Register** on March 13, 2006 (71 FR 12781). Over the past several months, the NRC has issued drafts of the revised RGs for a 45-day public comment period. The NRC staff is currently addressing the stakeholder comments received on these RGs. Discussion The NRC regulates the siting, construction, and operation of commercially owned nuclear power facilities in the United States through a combination of regulatory requirements, licensing, and oversight (including inspection). These activities enable the agency to fulfill its mission to license and regulate the Nation's civilian use of byproduct, source, and special nuclear materials to ensure adequate protection of public health and safety, promote the common defense and security, and protect the environment. In late 2000, the NRC became aware that some electric companies were exploring the option of building new nuclear power plants in the United States. As a result, in February 2001, the Commission issued a staff requirements memorandum (SRM COMJSM-00-0003) directing the staff to

(1)assess its technical, licensing, and inspection capabilities, as well as its readiness to review new license applications and inspect new nuclear power plants;

(2)examine the regulatory infrastructure for 10 CFR Parts 50 and 52, as well as other applicable regulations; and

(3)identify any enhancements needed to ensure that the agency is prepared to review ESP, DC, and COL applications for new nuclear power plants. In response to the Commission's SRM, the staff issued SECY-01-0188, “Future Licensing and Inspection Readiness Assessment” (FLIRA), in October 2001. In addition, although the FLIRA stated that the staff considers the agency's current regulatory infrastructure adequate to support new reactor licensing, the staff has undertaken major infrastructure changes to make new licensing reviews more effective and efficient, and to reduce unnecessary regulatory burden on future applicants. The staff's ongoing review and revision of the NRC's RGs is one significant aspect of these infrastructure changes. Through the years, the NRC has established 10 broad divisions of RGs, of which the following are the subject of the staff's particular efforts to support new reactor licensing. • Division 1, Power Reactors • Division 4, Environmental and Siting • Division 8, Occupational Health Of these Divisions, the NRC identified a select group of RGs that required revision and are currently being updated to

(1)ensure consistency with the rulemaking to update 10 CFR Part 52;

(2)ensure coherence with NUREG-0800, “Standard Review Plan for the Review of Safety Analysis Reports for Nuclear Power Plants” (SRP), which is also undergoing staff review and revision; and

(3)provide prospective applicants with complete, accurate, and current guidance for use in preparing ESP, DC, and COL applications for proposed new reactors. Following is a list of RGs along with the Draft Guide

(DG)numbers used during the public comment period. RG DG title 1.7 DG-1117 Control of Combustible Gas Concentrations in Containment Following a Loss-of-Coolant Accident. 1.9 DG-1172 Application and Testing of Safety-Related Diesel Generators in Nuclear Power Plants. 1.13 DG-1162 Spent Fuel Storage Facility Design Basis. 1.20 DG-1163 Comprehensive Vibration Assessment Program for Reactor Internals During Preoperational and Initial Startup Testing. 1.23 DG-1164 Meteorological Monitoring Programs for Nuclear Power Plants. 1.26 DG-1152 Quality Group Classifications and Standards for Water-, Steam-, and Radioactive-Waste-Containing Components of Nuclear Power Plants. 1.29 DG-1156 Seismic Design Classification. 1.37 DG-1165 Quality Assurance Requirements for Cleaning of Fluid Systems and Associated Components of Water-Cooled Nuclear Power Plants. 1.57 DG-1158 Design Limits and Loading Combinations for Metal Primary Reactor Containment System Components. 1.61 DG-1157 Damping Values for Seismic Design of Nuclear Power Plants. 1.68 DG-1166 Initial Test Programs for Water-Cooled Nuclear Power Plants. 1.71 DG-1167 Welder Qualification for Areas of Limited Accessibility. 1.76 DG-1143 Design Basis Tornado and Tornado Missiles for Nuclear Power Plants. 1.92 DG-1127 Combining Modal Responses and Spatial Components in Seismic Response Analysis. 1.93 DG-1153 Availability of Electric Power Sources. 1.97 DG-1128 Criteria for Accident Monitoring Instrumentation for Nuclear Power Plants. 1.112 DG-1160 Calculation of Releases of Radioactive Materials in Gaseous and Liquid Effluents from Light-Water-Cooled Power Reactors. 1.124 DG-1168 Service Limits and Loading Combinations for Class 1 Linear-Type Component Supports. 1.128 DG-1154 Installation Design and Installation of Vented Lead-Acid Storage Batteries for Nuclear Power Plants. 1.129 DG-1155 Maintenance, Testing, and Replacement of Vented Lead-Acid Storage Batteries for Nuclear Power Plants. 1.130 DG-1169 Service Limits and Loading Combinations for Class 1 Plate-and-Shell-Type Component Supports. 1.136 DG-1159 Design Limits, Loading Combinations, Materials, Construction, and Testing of Concrete Containments. 1.189 DG-1170 Fire Protection for Nuclear Power Plants. 1.196 DG-1171 Control Room Habitability at Light-Water Nuclear Power Reactors. 1.200 DG-1161 An Approach for Determining the Technical Adequacy of Probabilistic Risk Assessment Results for Risk-Informed Activities. 1.205 DG-1139 Risk-Informed, Performance-Based Fire Protection for Existing Light-Water Nuclear Power Plants. 4.15 DG-4010 Quality Assurance for Radiological Monitoring Programs (Inception through Normal Operations to License Termination)—Effluent Streams and the Environment. The staff is also currently developing the following new RGs to provide prospective applicants with complete, accurate, and current guidance for use in preparing ESP, DC, and COL applications for proposed new reactors: 1.206 DG-1145 Combined License Applications for Nuclear Power Plants (LWR Edition). 1.207 DG-1144 Guidelines for Evaluating Fatigue Analyses Incorporating the Life Reduction of Metal Components Due to the Effects of the Light Reactor Water Environment for New Reactors. 1.208 DG-1146 A Performance-Based Approach to Define the Site-Specific Earthquake Ground Motion. 1.209 DG-1142 Guidelines for Environmental Qualification of Safety Related Computer-Based Instrumentation and Control Systems in Nuclear Power Plants. The NRC finalized and published Revision 2 of RG 1.92 (July 2006), Revision 4 of RG 1.97 (July 2006), Revision 1 to RG 1.196 and Revision 1 of RG 1.200 (January 2007), and RG 1.205 (June 2006). The NRC plans to issue the remaining revised RGs as they are finalized between February and March of 2007. The staff has determined that the RGs listed previously may be uniformly applied (consistent with the staff guidance provided in the SRP) to the ESP, DC, and COL applications submitted for proposed new reactors. Comment Procedures The NRC staff encourages and welcomes comments and suggestions in connection with improvements to published RGs, as well as items for inclusion in RGs that are currently being developed. You may submit comments by any of the following methods: • Mail comments to Rulemaking, Directives, and Editing Branch, Office of Administration, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001 (MS T-6 D59). • Hand-deliver comments to Rulemaking, Directives, and Editing Branch, Office of Administration, U.S. Nuclear Regulatory Commission, 11555 Rockville Pike, Rockville, Maryland 20852, between 7:30 a.m. and 4:15 p.m. on Federal workdays. • Fax comments to Rulemaking, Directives and Editing Branch, Office of Administration, U.S. Nuclear Regulatory Commission, at

(301)415-5144. • E-mail comments to *NRCREP@nrc.gov.* *Contact Information:* Contact information for use in obtaining printed or electronic copies of the revised RGs is provided in the section on Availability And Dates. Contact information for use in submitting comments is provided in the section on Comment Procedures. Comments or questions about the NRC's revision of RGs to support new reactor licensing should be addressed to Jimi T. Yerokun at

(301)415-0585 or by e-mail to *JTY@nrc.gov.* (5 U.S.C. 552(a)) Dated at Rockville, Maryland, this 2nd day of February, 2007. For the U.S. Nuclear Regulatory Commission, Farouk Eltawila, Director, Division of Risk Assessment and Special Projects, Office of Nuclear Regulatory Research. [FR Doc. E7-2372 Filed 2-9-07; 8:45 am] BILLING CODE 7590-01-P OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE Andean Trade Preference Act (ATPA), as Amended: Request for Public Comments Regarding Beneficiary Countries AGENCY: Office of the United States Trade Representatives ACTION: Notice; request for comments. SUMMARY: In compliance with section 203(f) of the ATPA, as amended, 19 U.S.C. 3202(f)(2), the Office of the United States Trade Representative

(USTR)is requesting the views of interested parties on whether the designated beneficiary countries are meeting the eligibility criteria under the ATPA., (See 19 U.S.C. 3203(b)(6)(B).) This information will be used in the preparation of a report to the Congress on the operation of the program. DATES: Public comments are due at USTR no later than 5 p.m., March 5, 2007. ADDRESSES: Submit comments by electronic mail (e-mail) to: *FR0518@USTR.EOP.GOV.* For assistance or if unable to submit comments by e-mail, fax your comments to Gloria Blue, Executive Secretary, Trade Policy Staff Committee, at

(202)395-6143. FOR FURTHER INFORMATION CONTACT: Michelle Carrillo, Office of the Americas, Office of the United States Trade Representative, 600 17th Street, NW., Room 523, Washington, DC 20508. The telephone number is

(202)395-9479. SUPPLEMENTARY INFORMATION: The ATPA, as amended by the Andean Trade Promotion and Drug Eradication Act of 2002 (ATPDEA) in the Trade Act of 2002, 19 U.S.C. 3201 *et seq.,* provides trade benefits for eligible Andean countries. In Proclamation 7616 of October 31, 2002, the President designated Bolivia, Colombia, Ecuador, and Peru as ATPDEA beneficiary countries. Section 203(f) of the ATPA (19 U.S.C. 3202(f)) requires the USTR, not later than April 30, 2007, to submit to Congress a report on the operation of the ATPA. Before submitting such report, USTR is required to request comments on whether beneficiary countries are meeting the criteria set forth in 19 U.S.C. 3203(b)(6)(B) (which incorporates by reference the criteria set forth in sections 3202(c) and (d)). USTR refers interested parties to the **Federal Register** notice published on August 15, 2002 (67 FR 53379)), for a full list of the eligibility criteria. *Required for Submissions.* In order to facilitate prompt processing of submissions, USTR strongly urges and prefers electronic (e-mail) submissions in response to this notice. In the event that an e-mail submission is impossible, submissions should be made by facsimile. Persons making submissions by e-mail should use the following subject line: “ATPA Beneficiary Countries.” Documents should be submitted as either WordPerfect, MSWord, Adobe PDF, or text (.TXT) files. Spreadsheets submitted as supporting documentation are acceptable as Quattro Pro or Excel. If any document submitted electronically contains business confidential information, the file name of the business confidential version should begin with the characters “BC-”, and the file name of the public version should begin with the characters “P-”. The “P-” or “BC-” should be followed by the name of the submitter. Persons who make submissions by e-mail should not provide separate cover letters; information that might appear in a cover letter should be included in the submission itself. To the extent possible, any attachments to the submission should be included in the same file as the submission itself, and not as separate files. Written comments, notice of testimony, and testimony will be placed in a file open to public inspection pursuant to 15 CFR 2003.5, except business confidential information exempt from public inspection in accordance with 15 CFR 2003.6. Business confidential information submitted in accordance with 15 CFR 2003.6 must be clearly marked “BUSINESS CONFIDENTIAL” at the top of each page, including any cover letter or cover page, and must be accompanied by a non-confidential summary of the confidential information. All public documents and non-confidential summaries shall be available for public inspection in the USTR Reading Room. The USTR Reading Room is open to the public, by appointment only, from 10 a.m. to noon and 1 p.m. to 4 p.m., Monday through Friday. An appointment to review the file must be scheduled at least 48 hours in advance and may be made by calling

(202)395-6186. Carmen Suro-Bredie, Chairman, Trade Policy Staff Committee. [FR Doc. 07-614 Filed 2-9-07; 8:45 am]

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